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The Independent

Managed Assets Program (“IMAP”)

Wrap-Fee Disclosure Brochure

5002 T-Rex Avenue – Suite 225

Boca Raton, FL 33431

(800) 346-4570

www.ipcanswers.com

Form ADV, Part 2A – Appendix 1

March, 2017

This Wrap-Fee Program Disclosure Brochure provides information about the qualifications and

business practices of Independent Portfolio Consultants, Inc. and its Managed Assets Program

that you should consider before becoming a client. If you have any questions about the contents

of this brochure, please contact Independent Portfolio Consultants, Inc. (“IPC”) at the

address listed above or call us at (800) 346-4570 or send us an e-mail at

customerservice@ipcanswers.com. The information in this brochure has not been approved or

verified by the United States Securities and Exchange Commission or by any state securities

authority.

As an SEC Registered Investment Advisor, additional information is also available about IPC on

the SEC’s website at www.adviserinfo.sec.gov. However, registration does not imply a certain

level of skill or training.

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2. Summary of Material Changes ******************************************************************************

The Securities and Exchange Commission (“SEC”) has adopted amendments to Part 2 of Form

ADV and related rules under the Investment Advisers Act of 1940, as amended, (the “Adviser

Act”), which significantly alters the disclosures that registered investment advisers must provide

to clients. This Brochure is provided in accordance with the new rules.

The following are summaries of material changes to the IMAP Form ADV Part 2A-Appendix 1

Disclosure Brochure that have occurred since the September, 2016 version that was previously

provided.

The following section of the Disclosure Brochure has been revised:

Item 4 Services, Fees and Compensation

This Brochure or any IPC Brochure may be requested by either downloading it from the SEC’s

website at www.adviserinfo.sec.gov or you may contact Independent Portfolio Consultants, Inc.

(“IPC”) at 561-912-1040 or customerservice@ipcanswers.com to request an updated copy of this

Brochure.

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3. TABLE OF CONTENTS ******************************************************************************

1. IMAP COVER PAGE ...............................................................................................................1

2. SUMMARY OF MATERIAL CHANGES ..............................................................................2

3. TABLE OF CONTENTS ..........................................................................................................3

4. SERVICES, FEES AND COMPENSATION ..........................................................................5 INDEPENDENT MANAGED ASSETS PROGRAM SERVICES .......................................................................... 5

Separately Managed Account Portfolio Services ................................................................................................. 6 Multiple Manager Strategy Portfolio Services ..................................................................................................... 7 Tax-Transition Management Portfolio Services ................................................................................................ 10

INDEPENDENT MANAGED ASSETS PROGRAM FEES ................................................................................. 10 IMAP SMA Annual Fee Schedules ..................................................................................................................... 11

Preferred Equity Accounts (over $1,000,000) ................................................................................................................. 11 Equity Opportunistic Accounts ....................................................................................................................................... 12 Equity Tax-Transition Management Accounts ............................................................................................................... 12 Preferred Balanced Accounts (over $1,000,000) ............................................................................................................ 12 Fixed Income Accounts .................................................................................................................................................. 12 Preferred Fixed Income Accounts (over $1,000,000) ..................................................................................................... 13 Fixed Income Plus Accounts ........................................................................................................................................... 13

IMAP UMA Annual Fee Schedules .................................................................................................................... 13 Multiple Manager Strategy Portfolio (“MMSP”) Accounts ............................................................................................ 13 MMSP Diversified Multi-Strategy(ies) ........................................................................................................................... 14

Additional Client Fees ....................................................................................................................................... 14 Evaluating the Cost of IPC’s Wrap-Fee Programs ............................................................................................ 15

5. ACCOUNT REQUIREMENTS AND TYPES OF CLIENTS .............................................16 MINIMUM ACCOUNT SIZE; ACCOUNT TERMINATION .............................................................................. 16

Separately Managed Accounts ........................................................................................................................... 16 Unified Managed Accounts ................................................................................................................................ 16

TYPES OF CLIENTS ............................................................................................................................................. 17

6. PORTFOLIO MANAGER SELECTION AND EVALUATION .......................................17 INVESTMENT MANAGER DUE DILIGENCE................................................................................................... 17

Selection of Investment Managers Available in the Program ............................................................................ 17 Separately Managed Accounts ........................................................................................................................................ 17 Unified Managed Accounts............................................................................................................................................. 18 Other Resources .............................................................................................................................................................. 18 Performance .................................................................................................................................................................... 18

Ongoing Evaluation of Investment Managers in the Program........................................................................... 19 INVESTMENT MANAGER SELECTION ........................................................................................................... 19

Selection of Investment Managers for Client Portfolios .................................................................................... 19 Ongoing Evaluation of Investment Managers for Client Portfolios ................................................................... 20

IPC AND THE BLUE SHORES CAPITAL STRATEGIES .................................................................................. 21 Blue Shores Capital Advisory Business ............................................................................................................. 22

Global Long/Short Core Equity ................................................................................................................................. 22 Global Multi-Strategy Income ................................................................................................................................... 23 Concentrated Equity Opportunities ............................................................................................................................ 23 Balanced .................................................................................................................................................................... 24 Fixed Income ............................................................................................................................................................. 24

IPC Equity Index Strategy(ies) ........................................................................................................................... 25 PERFORMANCE-BASED FEES & SIDE-BY-SIDE MANAGEMENT .............................................................. 26

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BSC METHODS OF ANALYSIS .......................................................................................................................... 26 Global Long/Short Core Equity ......................................................................................................................... 26 Fixed Income ...................................................................................................................................................... 27 Global Multi-Strategy Income ............................................................................................................................ 27 Concentrated Equity Opportunities ................................................................................................................... 28

IPC EQUITY INDEX STRATEGY(IES) METHODS OF ANALYSIS ................................................................ 29 INVESTMENT STRATEGIES AND RISK OF LOSS .......................................................................................... 30 VOTING CLIENT SECURITIES (PROXY VOTING POLICY SUMMARY) .................................................... 38

7. CLIENT INFORMATION PROVIDED TO PORTFOLIO MANAGERS .......................39 INVESTMENT POLICIES AND INVESTMENT MANAGER COMMUNICATIONS ...................................... 39

8. CLIENT CONTACT WITH PORTFOLIO MANAGERS .................................................40

9. ADDITIONAL INFORMATION ...........................................................................................40 DISCIPLINARY INFORMATION ........................................................................................................................ 40 OTHER FINANCIAL INDUSTRY ACTIVITIES & AFFILIATIONS ................................................................. 41 INVESTMENT DISCRETION .............................................................................................................................. 41 CODE OF ETHICS ................................................................................................................................................ 41 PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS & PERSONAL TRADING ........................ 42

Brokerage Executions ........................................................................................................................................ 42 Best Execution ................................................................................................................................................................ 42 Brokerage Transactions ................................................................................................................................................... 42 IPC Trade Aggregation and Allocation ........................................................................................................................... 44 Error Correction Practices ............................................................................................................................................... 45

REVIEW OF CLIENT ACCOUNTS ..................................................................................................................... 46 Separately Managed Accounts ........................................................................................................................... 46 Multiple Manager Strategy Portfolio Accounts ................................................................................................. 46 Client Reporting ................................................................................................................................................. 47 Electronic Access of Communications ............................................................................................................... 48

CLIENT REFERRALS & OTHER COMPENSATION ........................................................................................ 49 Referral Arrangements ....................................................................................................................................... 49 Additional Compensation to IPC and its Affiliates ............................................................................................ 49

CONFLICTS OF INTEREST ................................................................................................................................. 51 FINANCIAL INFORMATION .............................................................................................................................. 52 SERVICES AND COMPENSATION DISCLOSURE (ERISA) ........................................................................... 52

Services .............................................................................................................................................................. 52 Status .................................................................................................................................................................. 52 Direct Compensation ......................................................................................................................................... 53 Indirect Compensation ....................................................................................................................................... 53 Compensation Paid Among Related Persons ..................................................................................................... 54 Manner of Receipt .............................................................................................................................................. 54 Compensation for Termination of Contract or Arrangement ............................................................................. 54

BROCHURE SUPPLEMENT ................................................................................................................................ 54

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4. Services, Fees and Compensation ******************************************************************************

Independent Portfolio Consultants Inc. (“IPC”) specializes in providing investment advisory,

consulting and investment management services through its managed accounts programs to

independent Wealth Management Companies and their clients. The Wealth Management

Companies that IPC’s services include nationally recognized insurance companies, registered

investment advisers, brokerage firms, and financial/estate planning organizations. IPC assists

Wealth Management Companies to custom-build and brand their own wrap-fee programs, as

well as, or in addition to, utilizing IPC’s managed asset wrap-fee program(s) directly. These

Wrap-Fee Programs provide Clients with investment advisory, consulting and execution services

for a single “wrap” fee, typically a percentage of assets.

Throughout this Wrap-Fee Program Brochure (“Brochure”), these entities will be referred to as

“Wealth Management Companies” and the individual representatives of those entities will be

referred to as “Wealth Managers” or “Investment Executives.” Through these Wealth

Management relationships, IPC services both individual and institutional clients, including

corporate pension and profit sharing plans and nonprofit/charitable organizations. IPC also

provides investment advisory, consulting and investment management services directly to

individual and institutional clients.

IPC is independent and employee owned, with corporate headquarters in Boca Raton, Florida,

and a history that dates back to 1989. The Firm has achieved a solid history of supporting wrap-

fee programs by employing a highly skilled group of experienced professionals, supported by an

exceptional client service team. Individuals associated with IPC that provide these services are

licensed, qualified and authorized to provide advisory services as investment adviser

representatives. Throughout this Brochure, these individuals will be referred to as “IPC

Consultants.”

The Independent Managed Assets Program and its services are described below. However, for

information on other IPC wrap-fee programs, please contact IPC as noted in the information

provided on the front cover of this Brochure.

INDEPENDENT MANAGED ASSETS PROGRAM SERVICES

Independent Portfolio Consultants, Inc. offers the Independent Managed Assets Program

(“IMAP”) that is designed for Wealth Management Companies and their Clients who seek

personalized portfolio management services. This includes Clients who desire assistance in

determining appropriate investment objectives, taking into account their overall financial

circumstances, including objectives, risk tolerance and tax status. Clients may also desire

assistance in: (1) choosing an appropriate investment manager(s) and/or investment strategy(ies);

(2) monitoring the results of their investment account; and (3) making future investment

management decisions, based both on account performance and upon changes in the Client’s

overall financial circumstances. IMAP is an advisory wrap-fee program that provides this

complete range of services in a customized portfolio.

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IPC Consultants, working with Investment Executives, begin by reviewing each Client’s overall

financial circumstances and risk tolerances and identifying the Client’s investment objectives.

Then, they assist the Client in the selection of one or more appropriate investment management

firms (“Investment Managers”) and/or investment strategies from among those firms which have

been accepted by IPC into IMAP. On an ongoing basis, IPC assists in monitoring the Client’s

portfolio performance. The complete range of services that IPC provides in IMAP includes:

Due diligence on Investment Managers and investment strategies offered in IMAP

Development of the Client’s investment policy

Consultation with the Client on selection of one or more Investment Managers and/or

investment strategies in which the account is to be managed

IPC monitors the Investment Manager(s) and/or investment strategy(ies) selected and

reports their progress to the Client quarterly

Client is provided Quarterly Statements for their account(s)

IPC provides Ongoing Consulting and Advisory Services that will consult or meet

with the Client to periodically review the Client’s account(s) and investment

objectives based upon the Client’s schedule

Brokerage Services through an agreement with Managed Account Services, LLC

(“MAS”) – this includes transaction/clearing costs generated in the purchase and sales

of exchange-traded funds, equity or fixed income securities in the Client’s portfolio

Clients enter into a Letter Agreement and/or the Investment Advisory Agreement with IPC and

other Investment Manager(s) as described below. In addition, the Client or IPC may be asked to

provide information regarding Client’s brokerage account documents, including standard forms

and questionnaires. If there is any conflict between the information in a brokerage account

document and IPC documentation, the IPC documentation shall control.

Separately Managed Account Portfolio Services

IPC’s separately managed account is a privately managed investment portfolio of assets

under the management of a professional investment firm. This managed account offers

Clients the freedom and ability to establish guidelines for the investments within the

portfolio, and any decision made by the Investment Manager is based on the individual

investor’s goals and objectives.

Clients select an Investment Manager who then becomes responsible for day-to-day

investment decisions, supported by a team of investment professionals, operations and

administrative staff. Separately managed accounts (“SMAs”) differ from pooled vehicles

such as mutual funds in that each portfolio is unique to a single account.

With this managed account, IPC provides the Client with on-going access and

communication with the Investment Manager selected to manage their portfolio. IPC’s

Ongoing Consulting Group works with the Investment Executive and the Client to set up and

coordinate Client reviews of their IMAP accounts.

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Client Customization

IPC offers Clients a higher level of customization that can be closely aligned with a

Client’s specific return objectives, risk tolerance and special circumstances than could be

achieved with a pooled vehicle. This high level of customization is particularly important

when it comes to individual tax planning for Client’s investments.

With separately managed accounts, Clients have a greater degree of control over these

decisions, in that they are more closely attuned to the objectives and constraints set forth

in the investment policy statement.

The Investment Manager selected by the Client to manage the account has the

responsibility and discretion to make investment decisions for the Client’s account based

upon the Client’s specific goals and objectives set forth in the Client’s investment policy

statement. The decisions can be unique at the account level and may, therefore, vary

from one investor to another.

IPC assists the Client in monitoring the results of their investment account(s) in relation

to their particular goals and objectives stated in their Statement of Investment Policy.

The Client’s Investment Executive and the IPC Ongoing Consulting Group will consult

with the Client concerning the Investment Manager(s)’s investment performance, and

assist the Client in making future investment management decisions, based both on

account performance and upon changes in their overall financial circumstances.

Multiple Manager Strategy Portfolio Services

The Multiple Manager Strategy Portfolio (“MMSP”) is an investment portfolio that will use

one or more investment strategies that use various equity and fixed income asset classes and

investment approaches. All the investment strategies are contained in one unified managed

account (“UMA”) rather than having each investment strategy held in multiple separately

managed individual accounts. The MMSP gives the Client the ability to obtain multiple

managers, affordable diversification, customization and consolidated reporting all in one

account.

Each Client’s MMSP account is managed to replicate one or more investment strategies that

are typically provided by various third party investment advisory firms (“Model Managers”).

The Model Managers act as sub-advisers and provide IPC with a “Model Portfolio,” which is

a list of securities that replicates the managers’ actual investment strategy. IPC then acts as

Overlay Portfolio manager for Client MMSP accounts, implementing the Model Managers’

model portfolio for Client accounts. Each of the Model Manager’s strategies selected will

represent a portion of the overall Client MMSP account.

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In each MMSP Portfolio, IPC will combine the investment strategies of one or more Model

Managers, as described above. In addition, Clients may wish to include a broader allocation

to their portfolio by adding a broad ETF or other complementary asset class investments to

their allocation. IPC may or may not have discretion over such an additional selection

depending upon the agreement with the Client. Where IPC has discretion, IPC shall provide

ongoing management of the portfolio and periodically replace Model Managers and/or ETFs

in its discretion. IPC provides overlay management services for the MMSP Accounts and the

Client directly owns the underlying securities in the portfolio.

IPC may recommend to Clients participating in the MMSP that a portion of the Client’s

portfolio be invested in one or more other investments in lieu of allocating assets separately

to an Investment Manager or Model Manager strategy. These other investments may include

publicly traded mutual funds and Exchange-Traded Products (“ETPs”) such as Exchange-

Traded Notes (“ETNs”) and Exchange-Traded Funds (“ETFs”). However, IPC generally

does not have the discretion to invest Client’s assets in such investments and the decision to

purchase such investments rests solely with the Client. See the Independent Managed Assets

Program Fees Section below, subsection entitled “MMSP Equity Focused Large-Cap Index

Strategy.”

Client Customization

The MMSP offers Clients who wish to personalize their investment portfolios with more

flexibility by providing the ability to customize their investment account based on the

specific goals, risk tolerance and timeframe related to the assets they wish to place in that

account. This structure also offers the ability to use asset allocation strategies which

consider the historic rates of return of different asset classes over long periods of time.

This may be useful for a Client seeking to increase or reduce the account’s risk or

portfolio volatility.

IPC also develops a customized investment strategy for a Client. Fees for such services

are negotiated on a case-by-case basis. IPC develops new investment management

strategies with funds provided by IPC, IPC employees, their family members and a

limited number of Clients before such management strategies are made available

generally. IPC may or may not charge a fee for the management of such accounts.

IPC As Overlay Portfolio Manager

As the Overlay Portfolio Manager, IPC has discretion over the MMSP account. IPC

contracts with Model Managers who act as sub-advisers and provide their investment

models for the MMSP. IPC uses these models in managing a Client’s account. However,

under certain circumstances and at the Client’s request, IPC will also act as a manager in

an MMSP account. (See the section entitled IPC and The Blue Shores Capital Strategies

below).

IPC selects the Model Manager Models for the MMSP based upon their specialized

management styles and strategies. The securities selected for the Client’s MMSP are

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chosen by the Model Manager from that particular manager’s investment model or focus

list. Changes in a model portfolio are based upon the Model Manager’s Investment

Policy, Research and/or Focus Committees’ decisions.

However, Client’s goals, risk tolerance, timeframe and the amount of assets allocated to a

model may impact the implementation of the investment process. The impact may alter

the performance of the individual Client account in relation to the model. The presence

or absence of investment restrictions; the timing of trades and the presence of deposits

and withdrawals will also affect performance.

While both cash and securities may be used to fund MMSP accounts, it is the intent of

IPC that all securities so received be liquidated prior to, or simultaneous with, the

purchase of securities for the account.

Exchange-Traded Funds

When appropriate, and requested by the Client, the MMSP may use Exchange-Traded

Products (“ETPs”) such as equity or fixed income Exchange-Traded Funds (“ETFs”).

ETFs, consisting of fixed income products which can be added to an equity portfolio to

create a balanced account approach, whereby the account has an allocation of both equity

and fixed income. Additionally, an ETF may be selected to add a broader diversification

to the equity or fixed income allocation of a portfolio. Also, an ETF may be added to

target a specific investment style allocation or country allocation. The Investment

Executive, generally working in conjunction with IPC Consultants, will assist each Client

in the selection of the investment strategy that is appropriate for the Client’s investment

objectives.

MMSP Risk

The risk of the MMSP is that the allocation combination of investment strategies chosen

by a Client may not achieve their intended objective to either increase or decrease the risk

or volatility of the account. Additionally, the risk associated with this MMSP strategy

allocation, depending upon the size of the account, is that a balanced account with only

two strategies may be limited to one large capitalization equity investment strategy.

Thus, while the fixed income sector is broadly diversified through the Model

Manager(s)’s use of Exchange-Traded Funds (ETFs) for fixed income, the equity sector

will be limited to one large capitalization growth, value or core equity strategy.

Consequently, such an account with two strategies may not provide the Client with the

equity diversification that other investment products would provide, including various

combinations of equity mutual funds. However, a $500,000 all equity account will

provide the Client with the diversification of two different equity strategies within one

account.

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Tax-Transition Management Portfolio Services

Tax-Transition Management (“TTMP”) is an investment management strategy designed to

provide tax-efficiencies for Clients who seek to minimize their capital gains when changing

investment strategies or advisors. The strategy’s objective is to transition Clients’ portfolios

from significant, low-cost basis, or concentrated common stock positions to pre-determined,

targeted, diversified portfolios of common stocks in a highly tax-sensitive and efficient

manner. The speed of the transition is dependent upon the Client’s annual capital gains

budget. As portions of the low-cost basis stock positions are sold, the proceeds are

systematically reinvested in the common stock positions as identified in the targeted

portfolio.

IPC assists the Client in developing a Statement of Investment Policy and an asset allocation

guideline, while the Client sets their capital gains budget for the transition. IPC provides

various investment styles managed by Investment Managers or Sub-Advisers to IPC. IPC

assists the Client to customize their targeted portfolio based upon the Client’s own risk

tolerances and objectives.

INDEPENDENT MANAGED ASSETS PROGRAM FEES

IMAP is an advisory wrap-fee program offered on a discretionary basis. The fee schedule

applicable to an IMAP Account is determined based on the type and size of the account as set out

below. Except as otherwise noted, fees are calculated per Investment Manager, for each

separately managed account, based upon an overall Client relationship (i.e., total amount of

assets and accounts to be managed).

All fees are negotiable based upon a number of factors including, but not limited to, the Client’s

objective, family or other related accounts, amount of assets under management, the anticipated

level of transactions, the number of managers and the investment strategy(ies) employed. The

fees are billed either monthly or quarterly in arrears, based upon the market value of the assets

under management (without reduction for any margin debit) including accrued interest, at the

end of each calendar month or quarter. Fees will be automatically debited from the account in

accordance with the Client authorization as described in the Letter Agreement with IPC and/or

the Investment Advisory Agreements with IPC.

The fees include the costs associated with consulting and advisory research and including:

Developing a Client’s Statement of Investment Policy

Assisting the Client in the selection of Investment Managers and Model Managers,

Styles and Strategies

Professional investment management services

Monitoring of Investment Managers and Model Managers, performance, reporting

and review services

Ongoing Consulting and advisory services

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Due diligence (except as noted below in Section 6, entitled “Portfolio Manager

Selection and Evaluation” in the Blue Shores Capital Subsection)

The fees also include brokerage commissions on the purchase and sale of securities, if Managed

Account Services, LLC (“MAS”) acts as broker, and custody charges, if MAS’ selected clearing

firm is the custodian. Additional fees may be incurred for transactions executed by a broker-

dealer other than through MAS or if a custodian other than MAS is used. Managed Account

Services, LLC is a securities broker-dealer registered with the Financial Industry Regulatory

Authority (“FINRA”) and is a member of the Security Investors Protection Company (“SIPC”).

The primary business of MAS is as a securities broker-dealer.

The initial fee covers the period from the inception date through the last day of the first billing

month or quarter (depending on the Client’s billing cycle) and will be pro-rated accordingly.

Thereafter, the Client will be charged on either a monthly or quarterly basis in arrears. The

monthly or quarterly period fee will be calculated based on the market value of the account on

the last business day of the billing cycle and will become due the first business day following

either the month or quarter for which the fee is charged.

In the event an account does not maintain a sufficient cash or money market fund balance to

cover IMAP’s fee, the Client may deposit additional funds (subject to certain restrictions for IRA

and qualified retirement plan accounts) within five days, or Managed Account Services, LLC

may, at its discretion, sell securities held in the account sufficient to cover fees.

For Clients subject to the Employee Retirement Income Security Act of 1974, as amended

(“ERISA”) or other tax qualified accounts, the receipt of compensation and fees referred to in

this Brochure are subject to the restrictions imposed by ERISA and any applicable exemption

thereto.

The total fee paid by the Client includes fees paid to the Wealth Management Company and its

Investment Executive (if applicable), IPC, brokerage costs (if MAS acts as the broker-dealer),

custodial costs (if MAS is the custodian). The fee also includes the investment management

services provided by the Investment Manager, Sub-Adviser or Model Manager based upon the

fee schedule selected. Applicable fee schedules are as follows:

IMAP SMA Annual Fee Schedules

Preferred Equity Accounts (over $1,000,000)

Market Value

of Account

Client Fee

Wealth

Mgmt Co.

Investment

Manager

IPC

First $ 1,000,000 1.750 % 0.775 % 0.500 % 0.475 %

Next $ 1,000,000 1.650 % 0.760 % 0.500 % 0.390 %

Next $ 3,000,000 1.500 % 0.750 % 0.400 % 0.350 %

Next $ 5,000,000 1.250 % 0.580 % 0.400 % 0.270 %

Next $ 10,000,000 1.000 % 0.450 % 0.300 % 0.250 %

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Equity Opportunistic Accounts

Market Value

of Account

Client Fee

Wealth

Mgmt Co.

Investment

Manager

IPC

First $ 1,000,000 1.750 % 0.775 % 0.550 % 0.425 %

Next $ 1,000,000 1.650 % 0.760 % 0.550 % 0.340 %

Next $ 3,000,000 1.500 % 0.750 % 0.550 % 0.200 %

Over $ 5,000,000 Negotiable

Equity Tax-Transition Management Accounts

Market Value

of Account

Client Fee

Wealth

Mgmt Co.

IPC

First $ 1,000,000 1.950 % 0.775 % 1.175 %

Next $ 1,000,000 1.850 % 0.760 % 1.090 %

Next $ 3,000,000 1.700 % 0.750 % 0.950 %

Next $ 5,000,000 1.450 % 0.580 % 0.870 %

Next $ 10,000,000 1.200 % 0.450 % 0.750 %

Preferred Balanced Accounts (over $1,000,000)

Market Value

of Account

Client Fee

Wealth

Mgmt Co.

Investment

Manager

IPC

First $ 1,000,000 1.750 % 0.775 % 0.500 % 0.475 %

Next $ 1,000,000 1.650 % 0.760 % 0.500 % 0.390 %

Next $ 3,000,000 1.500 % 0.750 % 0.400 % 0.350 %

Next $ 5,000,000 1.250 % 0.580 % 0.400 % 0.270 %

Next $ 10,000,000 1.000 % 0.450 % 0.300 % 0.250 %

Fixed Income Accounts

Market Value

of Account

Client Fee

Wealth

Mgmt Co.

Investment

Manager

IPC

First $ 1,000,000 1.250 % 0.450 % 0.350 % 0.450 %

Next $ 4,000,000 1.000 % 0.350 % 0.300 % 0.350 %

Next $ 5,000,000 0.750 % 0.300 % 0.250 % 0.200 %

Next $ 10,000,000 0.625 % 0.225 % 0.250 % 0.150 %

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Preferred Fixed Income Accounts (over $1,000,000)

Market Value

of Account

Client Fee

Wealth

Mgmt Co.

Investment

Manager

IPC

First $ 1,000,000 1.050 % 0.350 % 0.350 % 0.350 %

Next $ 2,000,000 1.000 % 0.350 % 0.300 % 0.350 %

Next $ 2,000,000 0.900 % 0.300 % 0.300 % 0.300 %

Next $ 5,000,000 0.800 % 0.300 % 0.250 % 0.250 %

Next $ 10,000,000 0.650 % 0.250 % 0.250 % 0.150 %

Fixed Income Plus Accounts

Fixed Income Plus Accounts are designed for Clients who wish to invest most of their

assets in fixed income investments, in conjunction with a smaller investment in equity

securities. (The account is designed to contain not more than a 20% equity allocation at

cost; however, the equity portion of the account may increase to approximately 30% of

the account as a result of market appreciation.) The total fee for a Fixed Income Plus

Account is determined by applying the Equity Account Fee Schedule to the equity

portion and the Fixed Income Fee Schedule to the fixed income and cash equivalent

portion.

IMAP UMA Annual Fee Schedules

Multiple Manager Strategy Portfolio (“MMSP”) Accounts

Market Value

Of Account

Client Fee

Wealth

Mgmt Co.

IPC

First $ 250,000 2.250% 1.000% 1.250%

Next $ 250,000 2.250% 1.500% 0.750%

Thereafter 1.750% 1.000% 0.750%

Within the MMSP, fees are generally negotiable on a case-by-case basis. The total

MMSP fee includes a portion for the Wealth Management Company and its Wealth

Manager or Investment Executive, as applicable.

Fees with respect to the portion of a Client’s IMAP account not invested in the Multiple

Manager Strategy Portfolio will be calculated as set out previously in this Brochure (see

sections applicable to those assets). Assets invested in the Multiple Manager Strategy

Portfolio Accounts will not be considered in establishing fees applicable to those other

assets. For example, a Client has $2,500,000 of investable assets and allocates

$1,500,000 to an MMSP account and $1,000,000 to an all fixed Income separately

managed account. The MMSP fee schedule would apply to the $1,500,000 and the Fixed

Income Preferred Account fee schedule above would apply to the $1,000,000 account.

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MMSP Diversified Multi-Strategy(ies)

Market Value

Of Account

Maximum

Client Fee

Maximum

Wealth

Mgmt Co. Fee

IPC

First $1,000,000 0.950% 0.500% 0.450%

Next $1,000,000 0.900% 0.450% 0.450%

Over $2,000,000 Negotiable

If an above strategy is incorporated into an MMSP along with other strategies, then the

strategy assets will be billed separately from the other investment model strategies based

upon the above fee schedule.

When an ETF or ETN is selected to add a complementary asset strategy as a broader

diversification to equity or fixed income allocation of a portfolio, or selected to target a

specific investment style, asset class or country allocation, the services provided will be

billed based upon the advisory services provided by IPC and the Wealth Management

Company’s Investment Executive. When a Client invests a portion of its portfolio in an

ETF or ETN, IPC’s fee for that portion of the Client’s assets does not include any amount

for portfolio manager fees (and is accordingly reduced) since the fund incurs

management fees. The fund also incurs other operating fees and expenses, which are

disclosed in the prospectus for the funds.

The advisory services provided for the above include, but are not limited to, assisting in

the development and ongoing monitoring of the Client’s investment strategy, investment

strategy recommendations, transaction/clearing cost generated in the purchase and sale of

Exchange-Traded Products in the Client’s portfolio, performance reporting, monthly

statements, trade confirmations and custody of assets in the Client’s portfolio.

Additional Client Fees

The fee charged for participation in any IPC program, (“Program Fee”) listed in this

Brochure is known as a “wrap-fee.” The Program Fee covers the cost of most services

provided by IPC, Investment Managers, Sub-Advisers and Model Managers including fees

for program operations, Managed Account Services, LLC (“MAS”) custodial charges and all

brokerage commissions of MAS. The Program Fees do not include: (1) custodial fees for

assets held outside MAS; (2) custodian or brokerage account administrative, maintenance or

other services charges or fees; (3) trustee fees charged for MAS (or their clearing agent, First

Clearing LLC) on qualified retirement plans, IRAs, cash management or similar accounts; (4)

taxes, including transfer taxes, U.S. Federal, State and international sovereign taxes; (5)

dividend reinvestment costs; (6) odd-lot differentials; (7) foreign receives and delivers; (8)

safekeeping fees or (9) any other charges imposed by law or otherwise agreed to with regard

to Client accounts. These fees will be charged to Client accounts in addition to the Program

Fees.

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As with most wrap-fees, the Program Fee does not cover the management, distribution and

other fees and expenses incurred by mutual funds, money market funds, unit trusts,

exchange-traded products or closed-end funds held in a Client’s account. These fees are

described in the prospectus of each respective investment product and are paid to the fund’s

investment advisers and other service providers, but ultimately are borne by all shareholders.

The Program Fee does not cover margin debit balances with MAS, any other custodian fees,

nor margin interest on such margin debit balances. To the extent that margin is used, fees

will be calculated on the total market value of the account without the reduction of any debit

balance. Trades in securities that customarily trade in “dealer markets,” such as fixed income

securities, may be placed through broker-dealers other than MAS, and, accordingly, the net

purchase or sale prices reflected on Client confirmations of such trades may reflect

commissions or dealer “markups” or “markdowns” charged and “spreads” earned by such

other broker-dealers. This is also true when Investment Managers select broker-dealers other

than MAS for some, or all, of their trade executions.

IPC and the Client agree that MAS may withhold any tax to the extent required by law, and

may remit such taxes to the appropriate governmental authority.

Additionally, the cash that is in the Client’s Account awaiting investment may be placed in

money market funds with management expenses and distribution fees which are paid under

distribution plans adopted by the funds pursuant to Rule 12b-1 under the Investment

Company Act of 1940. To the extent consistent with ERISA, MAS may receive all or a

portion of those distribution fees from the funds.

Evaluating the Cost of IPC’s Wrap-Fee Programs

IPC is the sponsor of the Independent Managed Assets Program (“IMAP”), a wrap-fee

program, and also provides investment advice as an Investment Manager for the MMSP and

other products offered within IMAP. In these situations, IPC is both the wrap-fee program

sponsor and one of the Investment Managers. A separate investment management agreement

is used when IPC acts as an Investment Manager in any of the wrap-fee programs.

In evaluating a wrap-fee arrangement to determine if the wrap-fee charged is more or less

than the aggregate cost of such services if they were to be provided separately, a Client

should recognize the brokerage transactions are made “net” of commissions (i.e., without

commissions) and a portion of the wrap-fee is generally considered as being in lieu of

commissions. Additionally, the Client should consider the level of activity (trading volume

or frequency) in a Client account, the value of custodial and other brokerage services, the

associated cost of trading, the advisory services and consulting services provided under this

arrangement, including professional account management services.

Investment Executives who recommend IPC’s wrap-fee programs receive compensation as a

result of Client participation in the program. The compensation to the Investment Executive

may be more or less than they would earn if the Client did not participate in a wrap-fee

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program. The compensation paid to Investment Executives is typically a variable percentage

of the Client fee.

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5. Account Requirements and Types of Clients ******************************************************************************

MINIMUM ACCOUNT SIZE; ACCOUNT TERMINATION

Separately Managed Accounts

Generally, the minimum dollar relationship size for a separately managed account for each

manager within IMAP is $1,000,000. The maximum number of individual accounts

permitted in a $1,000,000 relationship is three. The minimum account size is $250,000

within a relationship.

Unified Managed Accounts

The MMSP minimum account size is $200,000. However, within the MMSP account, the

average minimum investment per style or strategy is also $200,000. For example, a Client

may have selected two investment styles within an MMSP, one style with $400,000 while the

other style is invested with $100,000, totaling $500,000. The two investments meet the

average minimum investment requirement of $200,000.

The MMSP Diversified Equity Strategy(ies) and the MMSP Equity Focused Large-Cap

Index Strategy minimum account size is $100,000. Current equity holdings considered may,

or may not, be under IPC consultation and/or the introducing Investment Executive’s

direction.

The minimum account size for the Tax-Transition Management Portfolio is $2,000,000.

The minimum and maximum account constraints above may be waived at IPC’s discretion.

Although IPC’s general business practice is not to terminate accounts based on reduction in

account value, IPC reserves the right to terminate an account that drops below the required

minimum size.

Either IPC or the Client may terminate the management agreement(s) upon 30 days’ prior

written notice. In addition, the Client has the right to terminate the agreement(s) at no cost

(excluding market fluctuations or possible ramifications in the event of a liquidation), upon

written notice to IPC, any time within five business days after the effective date in which the

Client signed the agreement(s). If participation in a wrap-fee program is terminated by either

IPC or the Client, a pro-rata fee from the date of termination through the end of the previous

billing period will be billed.

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TYPES OF CLIENTS

Clients include, but are not limited to, individuals, pension and profit sharing plans, trusts,

estates, charitable or non-profit organizations, corporations, municipalities and Wealth

Management Companies. Tax-qualified, pension and profit sharing plans or other retirement

vehicles subject to the Employee Retirement Income Security Act of 1974, as amended

(“ERISA”) or the Internal Revenue Code of 1986, as amended are subject to special rules.

******************************************************************************

6. Portfolio Manager Selection and Evaluation ******************************************************************************

INVESTMENT MANAGER DUE DILIGENCE

Selection of Investment Managers Available in the Program

Separately Managed Accounts

The separately managed account (“SMA”) Investment Managers available in IMAP are

chosen by IPC through a detailed assessment of the Investment Manager’s strategy,

investment philosophy, style, methodology and technical procedures. The program uses

Investment Managers with varying investment styles and geographic locations. The

Investment Managers chosen for IMAP generally possess or exhibit:

Specifically stated goals

Identifiable and consistent investment strategies

A proven track record

An appropriate level of assets under management

Upon acceptance to IMAP, claim compliance to the Global Investment

Performance Standards* (“GIPS®”)

*The Global Investment Performance Standards (“GIPS®”) are a set of

standardized, industry-wide ethical principles that provide investment firms with

guidance on how to calculate and report their investment results to prospective

clients. The GIPS® standards are voluntary and are based on the fundamental

principles of full disclosure and fair representation of investment performance

results. Claiming compliance with the GIPS® standards demonstrates a firm-wide

commitment to ethical best practices and that the firm employs strong internal

control processes. The GIPS® Executive Committee promotes the adoption and

implementation of GIPS®, believing that global standardization of investment

performance reporting gives investors around the world the additional

transparency they need to compare and evaluate investment managers.

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Investment Managers who meet these criteria are subject to additional reviews. These

reviews may include, but are not limited to, the development of a company profile,

analysis of the organization and its procedures and an assessment of the firm’s adherence

with regard to some of the general requirements and disclosures of the Investment

Advisers Act of 1940. An evaluation of the following may also be completed: (1) the

company’s compliance with industry standards; (2) operations; (3) marketing and Client

support services; (4) growth characteristics and (5) regulatory/compliance history.

Unified Managed Accounts

The investment model strategies used in the MMSP are provided by Model Managers.

Due diligence is conducted on the Model Managers, except for Blue Shores Capital, a

division of IPC, the IPC Investment Products offered such as the Diversified Equity

Strategy(ies) and the Equity Focused Large-Cap Index Strategy. The Models are chosen

by IPC through a detailed assessment of the Model Manager’s strategy’s investment

philosophy, style, methodology and technical procedures. However, Model Managers are

not required to claim compliance to the Global Investment Performance Standards

(“GIPS®”). Although, most of the Model Managers in IMAP claim compliance to the

GIPS® standards. The program uses Model Managers with varying investment styles

and geographic locations.

Other Resources

Other resources that may be used to identify and monitor Investment Managers and

investment model strategies include database services, Form ADV, other disclosure

documents, detailed questionnaires completed by each Investment Manager, Model

Manager Firm, and on-site visits to the SMA Investment Managers.

Performance

IPC’s review of the Investment Managers and the investment model strategy

(collectively, “Investment Firms”) performance record is an important component of the

due diligence process. IPC conducts performance reviews to determine (1) the

methodology used in calculating performance, (2) the standards that are being applied

and (3) the methods by which the performance composites that are used in the program

are constructed. Generally, Investment Firms indicate that performance is calculated and

presented in conformity with the Global Investment Performance Standards. However,

not all Investment Firms calculate and report performance in a uniform and consistent

basis. Not all of the Investment Firms receive a third party audit of their GIPS®

Compliance. Inquiries are made by IPC into the methodology used in order to gain a

comfortable understanding that the composite performance of the style for which IPC

engaged the Investment Firm is calculated in a prudent manner and in compliance with

applicable rules and regulations. While IPC reasonably believes such performance

numbers are accurate, IPC does not independently verify nor attest to the stated

performance of any Investment Firm.

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The MMSP or the Tax-Transition management services may or may not include the due

diligence specific to a performance composite as it relates to a management style. This

may be the result of some Model Managers contracting with various intermediate

investment firms (“contracted firms”) to provide their investment model. Additionally,

the Model Manager may not have many, if any, individual clients of their own. Having

their own clients is a requirement to create their own performance composite

(performance track record). Currently, per industry regulations, such Model Managers

are not permitted to show other (contracted firm) clients as their clients.

Ongoing Evaluation of Investment Managers in the Program

Ongoing Investment Firm due diligence reviews are also a part of IMAP services provided.

The extent of the review is determined by, among other things, the length of time the

Investment Firm has been in IMAP and changes in Investment Firm’s personnel or processes.

Also, information is obtained from each Investment Firm concerning specific composite

performance results for each quarter. In addition, periodic visits are made to each of the

management companies to review the firm and update information.

IPC may decide the Investment Firm is no longer appropriate for the Program for various

reasons; including, but not limited to: (1) deviation from its stated style and philosophy, (2)

performance that varies significantly from its stated benchmark over a market cycle, (3) the

loss of key firm personnel, (4) the development of material regulatory problems or

compliance issues, or (5) failure to claim compliance with the Global Investment

Performance Standards (GIPS®), except as noted above for the MMSP. In such cases, the

Investment Executive in consultation with IPC or IPC through communication with the

Investment Executive may recommend that the Client select a different Investment Manager

or Model Manager.

An Investment Firm will not be recommended for termination from the program solely for

having short-term performance that is sub-par in relation to market performance if they have

maintained their stated investment style and philosophy, even if such strategy is currently not

popular.

INVESTMENT MANAGER SELECTION

Selection of Investment Managers for Client Portfolios

The Investment Executive or Wealth Manager works in conjunction with IPC Consultants.

Together, they assist each Client in the selection of one or more of the available Investment

Managers and Model Managers, as well as the appropriate styles/strategies that best meet the

Client’s investment objectives. Recommendations are based upon information gathered

while developing an investment policy for the Client. Typically, the following are reviewed:

the Client’s investment objectives and goals, net worth, current income, future income needs,

liquidity needs, risk tolerances, tax considerations, current investment structure and other

specific needs if communicated by the Client. An assessment is made based upon economic

V12-0 Page 20

and market conditions in relation to the information reviewed above. A recommendation as

to the Client’s appropriate Statement of Investment Policy is developed from the assessment.

To assist in the selection of Investment Managers and Model Managers, IPC makes available

to prospective clients and their Investment Executives, Investment Profiles and other

information such as performance information. The investment descriptions, performance,

and other information are based on data provided by or received from the Investment

Managers and Model Managers.

While IPC reasonably believes this information to be accurate, IPC does not independently

verify or attest to any Investment Manager’s or Model Manager’s performance.

Additionally, IPC does require Investment Managers, but not the Model Managers

participating in the MMSP, to present their performance data in conformity with the Global

Investment Performance Standards (GIPS®). Performance information may not be calculated

on a uniform and consistent basis.

Ongoing Evaluation of Investment Managers for Client Portfolios

Performance for each account in IMAP is calculated and reported to the Client by IPC in

conformance with industry standards that IPC believes are reasonable. Discrepancies

between account performance and Investment Manager or Model Manager composite

performance may occur as a result of an account’s individual investment guidelines and/or

restrictions. The performance of Client account(s) may deviate from the Investment

Manager’s or Model Manager’s composite performance for the accounts it manages in the

same style because of the size of the Client’s account(s), the presence or absence of

investment restrictions, the timing of trades and the presence or absence of cash deposits and

withdrawals.

IPC may believe the Investment Manager or Model Manager may no longer be appropriate

for the Client for various reasons; including, but not limited to:

the results based upon IPC’s Ongoing Evaluation of Investment Managers and

Model Managers in IMAP (as described above in that section) or where the

Investment Manager would be terminated in IMAP

the Investment Manager’s or Model Manager’s deviation from its stated style and

philosophy within a Client’s account

Investment Manager continuously deviates from the investment mandate in the

Client’s Statement of Investment Policy, unless Client authorizes such changes

performance that varies significantly from the Client’s stated benchmark over a

market cycle

the development of material regulatory problems or compliance issues, or

changes in the Client’s circumstances

In such cases, the Client’s Investment Executive, in consultation with IPC, or IPC, through

communication with the Client’s Investment Executive, may recommend that the Client

select a different Investment Manager.

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If a Client believes the Investment Manager or Model Manager they have chosen is no longer

meeting their investment needs and objectives, and decides to change such Managers, IPC’s

Ongoing Consulting Group will work with the Investment Executive and the Client to

establish an updated Statement of Investment Policy and recommend a new Investment

Manager or Model Manager. However, the Client should be aware that a new Investment

Manager or Model Manager might not accept all or any of the securities acquired by the

former Investment Manager or Model Manager; therefore, liquidation of the portfolio may

result in tax consequences for the Client.

IPC AND THE BLUE SHORES CAPITAL STRATEGIES

IPC and its Blue Shores Capital (“BSC”) division offer various investment model strategies

within IMAP.

These investment models are primarily available as investment management strategies within a

Multiple Manager Strategy Portfolio (“MMSP”). See the “IPC Equity Index Strategy(ies)” and

the “Blue Shores Capital Advisory Business” located in the next section for a description of their

investment philosophy and investment strategies.

BSC may be utilized as a single or multiple investment strategy within an MMSP where BSC

attempts to create an asset mix that provides an optimal balance between expected risk and return

for a long-term investment horizon.

Within the MMSP, these strategies may also be coordinated with other investment strategies.

This gives the Client the ability to invest in multiple manager investment strategies and obtain

further diversification, customization and consolidated reporting all in one account. The MMSP

services are further described in the section above “Multiple Manager Strategy Portfolio

Services” under Section 4, “Services, Fees and Compensation.”

Additionally, these strategies may be used as part of a Client’s overall asset allocation in a

Separately Managed Account (“SMA”) environment, whereby each investment strategy is

managed in a separate account as opposed to the MMSP above. In this situation, IPC and/or

BSC would represent only a portion of a Client’s total investment assets in conjunction with a

Client’s other SMA account(s) managed by third party Managers in IMAP. A Client would

choose any of the IPC and/or BSC, as well as other Investment Managers or other Model

Managers, to create the Client’s overall SMA investment allocation strategy.

When a Client selects the IPC or Blue Shores Capital strategies, IPC indirectly benefits from this

selection because a greater amount of the total IMAP fee will be paid to IPC than if the Client

selected a third party Manager. Accordingly, IPC has a potential conflict of interest including its

Blue Shores Capital division as part of a Client’s overall investment plan in conjunction with a

Client’s SMA. For ERISA accounts, due to regulatory constraints until further notice, Client

selection of available investment strategies that include third party Managers for Separately

Managed Accounts will not include IPC or BSC investment strategies. Therefore, as a Plan, the

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selection of investment strategies in SMA may be more limited than for IMAP accounts that are

not ERISA Plans.

Senior members of IPC’s staff regularly monitor IPC’s and BSC’s investment processes and

performance. However, neither IPC nor BSC undergoes the same due diligence and ongoing

monitoring that third party Managers or Model Managers in IMAP undergo and may not meet

the same criteria for inclusion in IMAP that third party Managers must meet.

Blue Shores Capital Advisory Business

Blue Shores Capital (“BSC”), a pioneer in alternative separate account management, seeks to

offer a value-added investment management service utilizing an active management

approach that BSC believes is not widely offered in the investment industry. BSC believes

their process offers more transparency and liquidity than a traditional alternative investment

managed portfolio.

Paramount to BSC’s investment philosophy is the belief that equity markets are very

efficient, but not perfectly efficient, particularly over the short-term. Furthermore, it is

BSC’s belief that market prices of publicly traded common stocks reflect both rational and

irrational factors. Therefore, while fundamental analysis is the primary investment discipline

used, technical analysis is also employed in the investment decision-making process.

Global Long/Short Core Equity

The Global Long/Short Core Equity Portfolio consists of a diversified group of strategic

individual equity holdings, in addition to, various tactical positions. An individual

company is purchased for the portfolio primarily on the basis of the portfolio

management team perceiving the business to possess some form of competitive

advantage, in addition to, its stock trading at attractive absolute valuation levels. Tactical

positions take into account ever-changing global business and market conditions and are

implemented via the use of traditional and alternative Exchange-Traded Products

(“ETPs”). Exchange-Traded Products include Exchange-Traded Funds (“ETFs”) and

Exchange-Traded Notes (“ETNs”). Such securities often include, but are not limited to,

synthetic short equity positions, as well as, long and short currency and commodity

positions.

Typically, when the portfolio management team has a neutral outlook on global equity

markets, the portfolio will have an approximate 60% net long exposure to broad stock

market movements. This exposure may be adjusted between 0%-100% as market

conditions evolve with the goal of participating in up markets, while avoiding substantial

losses in large corrections and bear markets.

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Global Multi-Strategy Income

The Global Multi-Strategy Income Portfolio invests in a diversified group of income-

producing asset classes which include Real Estate Investment Trusts (“REITs”),

Sovereign, Municipal and Corporate Bonds, Mortgages, Master Limited Partnerships

(“MLPs”), Bank Loans, Preferred Equity and Equity. The strategy seeks to deliver the

highest income opportunities that are attractive on a risk-adjusted basis and will do so

only through investments in Exchange-Traded Products (ETFs and ETNs) to implement

the strategy.

The strategy begins with a top-down macro assessment of the income landscape by

assessing each of its key asset categories across an integrated framework. The

assessment includes an analysis of absolute yield levels, credit and spread risks and a

forecast yield and total return target for each asset class. Based on the top down-

assessment and the BSC team’s asset forecast, a group of Exchange-Traded Products

(“ETPs”) will be selected. A bottom-up assessment is then made on each qualifying

ETP. This assessment will include an analysis of the portfolio holdings, current country

and industry exposures, expected yield and duration, issuer quality, technical analysis and

certain qualitative characteristics that are important in choosing an Exchange-Traded

Product. The team will then select the individual ETFs that maximize yield and provide

adequate trading liquidity, while maintaining the targeted risk budget. If market risk

levels are elevated or if the portfolio’s forecast risk is too high, the strategy will hedge,

via inverse ETPs, or utilize cash holdings in order to satisfy its risk budget.

Concentrated Equity Opportunities

The Concentrated Equity Opportunities (“CEO”) Strategy’s investment objective is to

seek long-term growth of capital. The CEO Strategy attempts to achieve its investment

objective by investing in a concentrated portfolio of equity securities, while attempting to

find non-correlated positions with specific catalysts that offer a high expected return that

also attempt to minimize potential losses. The equity securities in which the CEO

Strategy may invest include common and preferred stock (including convertible preferred

stock), partnership interests, business trust shares, interests in REITs, MLPs, warrants,

and depository receipts. The CEO Strategy may invest in equity securities without regard

to the jurisdictions in which the issuers of the securities are organized or situated and

without regard to the market capitalizations or sectors of such issuers.

Ideas are generated through the review of companies’ price momentum, valuations,

profitability and competitive advantage. The CEO Strategy uses fundamental analysis to

identify certain attractive characteristics of companies. Such characteristics may include:

free cash flow margins; sensible capital allocation policies; strong competitive positions;

solid balance sheets; stress-tested owners/managers; participation in stressed industries

having reasonable prospects for recovery; potential for long-term growth; significant

tangible assets in relation to enterprise values; high returns on invested equity and capital;

and the production of essential services and products. Free Cash Flow is defined as the

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cash a company would generate annually from operations after all cash outlays necessary

to maintain the business in its current condition.

The CEO Strategy may invest in “special situations” to achieve its objective. A special

situation arises when the securities of a company are expected to appreciate within a

reasonable time due to company-specific developments rather than general business

conditions or movements of the market as a whole. Such developments and situations

include liquidations, reorganizations, recapitalizations, mergers, spin-offs, management

changes, and technological developments.

Although the CEO Strategy normally holds a concentrated portfolio of equity securities,

the strategy is not required to be fully invested in such securities and may maintain a

significant portion of its total assets in cash and securities generally considered to be cash

equivalents, including U.S. Government securities, money market funds, and other

quality money market instruments. The CEO Strategy may maintain a certain amount of

cash or cash equivalents in a portfolio to take advantage of potentially new investment

opportunities. Under adverse market conditions or when the CEO Strategy is unable to

find sufficient investments meeting its criteria, cash and cash reserves may comprise a

significant percentage of the CEO Strategy’s total assets. However, when the CEO

Strategy holds a significant portion of assets in cash and cash reserves, it may not meet its

investment objective.

Balanced

Balanced accounts generally have an allocation to the Global Long/Short Core Equity

Strategy and a Fixed Income Strategy as described below. However, a balanced strategy

may include or have a separate allocation to the Global Multi-Strategy Income Strategy.

Such accounts seek a balance between capital growth, capital preservation, and current

income. The amount of Client assets allocated to fixed income securities is determined

based upon each Client’s unique return and risk objectives. Currently, BSC will only use

fixed income ETFs for the portion of the portfolio to be allocated to fixed income and

will not use bonds or debt securities.

Fixed Income

The fixed income strategy seeks to provide low-risk current income and limited capital

appreciation utilizing an intermediate fixed income investment strategy. The strategy

also seeks investment results that correspond generally to the price and yield

performance, before fees and expenses, of the generally investment grade credit sector of

(1) the United States Bond Market and the intermediate United States Treasury Market as

defined by the Barclays Capital U.S. Intermediate Government/Credit Bond Index for

taxable investments and (2) the U.S. Municipal Bond Market, as defined by the Barclays

Capital U.S. Five Year Municipal Bond Index for tax-exempt investments.

The fixed income positions of the portfolio may be repositioned from time-to-time to

adjust for certain interest rate scenarios based upon BSC’s research and analysis of the

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yield curve. BSC uses research by select economists and/or market strategists for interest

rate forecasts. Proprietary technical analysis (the use of price and volume patterns to

forecast security price movements) is used to confirm any interest rate forecast before

changes to the fixed income strategy security allocations are implemented.

When a Client retains BSC to manage their financial assets, a careful review is conducted to

determine the Client’s objectives and risk tolerances. The Client’s portfolio is constructed

accordingly. Client input is primarily limited to decisions about the target amount of cash

equivalents in the Statement of Investment Policy and the individual security restrictions.

Clients seeking solely fixed income management and do not have a capital appreciation

objective as an element of their financial objectives may not be appropriate Clients for BSC.

Blue Shores Capital services are provided as an Investment Manager as described in the

Services, Fees and Compensation Section of this Brochure. BSC participates as a wrap-fee

manager and receives a portion of the fee for its services. There is no difference in how BSC

manages wrap-fee accounts and other accounts.

IPC Equity Index Strategy(ies)

The strategy employs an investment approach designed to track the performance of a

particular index such as the Standard & Poor’s (“S&P”) 500 Index, a widely recognized

benchmark of U.S. stock market performance that is dominated by the stocks of large U.S.

companies. The strategy attempts to replicate the target index by investing all, or

substantially all, of its assets in various Exchange-Traded Funds (“ETFs”).

Indexing is an investment strategy for tracking the performance of a specified market

benchmark, or “index.” An index is an unmanaged group of securities whose overall

performance is used as a standard to measure the investment performance of a particular

market.

Although the strategy generally seeks to invest for the long-term, it may sell securities

regardless of how long they have been held. Generally, index funds and ETFs sell securities

in response to redemption requests or to changes in the composition of its target index.

Turnover rates for large-cap stock index funds tend to be low because large-cap indexes –

such as the S&P 500 Index – typically do not change significantly from year to year. This

strategy would follow similar guidelines and turnover would expect to be low for this

strategy also. However, since this strategy attempts to track the performance of an Index, by

investing in various ETFs that replicate the Index, the strategy will generally not hold a large

number of ETFs. Thus, there may be occasions where the turnover may be higher than

anticipated due to a smaller number of ETF holdings.

Turnover is important as a Fund may pay transaction costs, such as commissions, when it

buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may

indicate higher transaction costs and may result in higher taxes when Fund shares are held in

a taxable account. However, because the transaction cost for the portfolio is included in the

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IPC advisory fees charged to the portfolio, increased turnover is not likely to lead to a higher

transaction cost in this strategy.

PERFORMANCE-BASED FEES & SIDE-BY-SIDE MANAGEMENT

IPC does not charge any performance-based fees, which are fees based upon a share of the

capital gains on, or capital appreciation of, the assets in a Client’s account. As a result, IPC does

not engage in side-by-side management of accounts that are charged a performance-based fee

with accounts that are charged another type of fee (such as assets under management). As

described above, IPC provides investment management services based upon a percentage of

assets under management. However, accounts that are managed in the same style (e.g.) may not

be managed the same way due to the Client’s overall investment objective, discretion of the

Investment Manager assigned to the account, asset size and account restrictions.

BSC METHODS OF ANALYSIS

Investment analysis is conducted and strategies are implemented by the BSC Investment Strategy

Committee for the investment strategies. BSC manages a Global Long/Short Core Equity,

Global Multi-Strategy Income, Concentrated Equity Opportunity and Fixed Income investment

strategies.

Global Long/Short Core Equity

BSC’s Global Long/Short Core Equity Strategy employs two primary methods of analysis.

First, BSC uses a top-down approach that examines global macroeconomic data and

technical market security data. The second method focuses on individual security selection

for the Client portfolios.

The top-down macroeconomic analysis consists of reviewing the broad business conditions

and market cycles in an attempt to determine the best opportunities for investing capital. An

investment framework is established by focusing on, and determining, the percent long

equity exposure, style weightings, sector weightings, and global investment themes. To

establish a less than 100% long equity position (i.e., hedge) BSC increases the cash

allocation and/or purchases inverse ETFs, which have the effect of reducing total long

exposure.

BSC also applies technical analysis to multiple asset classes and markets to assist in the

timing of the implementation of investment decisions that lead to portfolio changes.

The BSC security selection process uses a discounted free cash flow model to determine the

valuation of stocks. BSC attempts to purchase securities when they are below their fair value

estimate and sell when they are at or above their fair value estimate. Attractively valued

securities are then screened based upon fundamental characteristics to determine a security’s

style alignment (i.e., growth or value) for proper representation in a portfolio based upon

BSC’s top-down macroeconomic analysis.

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In some situations, a global investment theme may be implemented using Exchange-Traded

Products (“ETPs”). This may occur when BSC, through their research, does not find

sufficient individual stock opportunities that meet their criteria as good candidates to

implement the global macro investment theme. Additionally, this process is supplemented

with the use of technical analysis to assist in the timing of purchase and sell decisions.

In some market environments, BSC may hedge the portfolio by purchasing inverse ETFs if

the risk of significant market correction appears high. Such securities serve as synthetic

short positions. More frequently, broad market or sector ETFs may be purchased as

temporary allocations until individual stock opportunities present themselves. At times,

ETFs or Exchange-Traded Notes that track the performance of commodities or currencies

may be used.

Fixed Income

Fixed income allocations are managed based entirely on the top-down approach described

above and implemented with fixed income ETPs. Fixed income allocations generally are

intermediate in term structure and generally investment grade. Adjustments to duration and

credit quality are made based on the top-down analysis approach.

Global Multi-Strategy Income

The Global Multi-Strategy Income Portfolio employs a multi-disciplinary approach to

investing utilizing macro, fundamental, technical and quantitative considerations. The

strategy seeks to be style neutral in its decision-making while pursuing high-yield return

opportunities that are attractive on a risk-adjusted basis. The portfolio management team

initiates its view with a top-down macro assessment of the income landscape by assessing

each of its key asset categories across an integrated framework. The macro assessment

includes an analysis of credit items such as absolute yield levels, interest rate risk, curve

analysis, credit and spread risk; as well as equity specific items such as the equity risk

premium, earnings growth estimates and dividend growth and coverage ratios.

Additionally, an assessment may include an integrated cross-asset class analysis reviewing

inter-market relationships such as stock/bond, stock/mortgage, stock/bank loan or

bond/REIT, bond/MLP etc., as well as a review of economic, political or regulatory

considerations. The macro lens will also analyze opportunities across the capital structure

and look for potential mispricing within such a framework.

The fundamental assessment involves an ongoing review and analysis of each of the

investment opportunities available at a security level. Factors examined to determine initial

portfolio positioning includes what securities constitute “core holdings”, maximum

exposures, sector and regional exposures, duration, expected yield, issuer quality and other

qualitative characteristics that are important in choosing an exchange-traded product.

The technical analysis includes a review of price action, sentiment, trade volume behavior,

tracking error versus the underlying and specific measures of trading liquidity.

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Quantitative metrics include multi-asset class return forecasts across short-, medium- and

long-term time frames, as well as many aspects of the risk management function. Key

metrics within the risk management function include past performance analysis, variance,

drawdown, asset class and security covariance and ongoing assessment of changes in trend or

behavior across correlations and relative price movements such as beta or tracking error

versus key asset classes.

In summary, a broad multi-factor process ensures that the strategy does not rely on a narrow

group of explanatory variables for market behavior, but rather the process relies on the

“weight of evidence” to prevail within its investment decision-making framework.

The asset classes targeted are generally income producing and a typical portfolio contains a

minimum of 4 and a maximum of 11 different asset classes. Each asset class may represent a

maximum of 25% of the portfolio. The hedge ratio typically ranges between 0% to 30% and

cash allocations range from 0% to 30%. Foreign currency exposure typically will not exceed

50%.

Concentrated Equity Opportunities

The Concentrated Equity Opportunities Strategy will rely primarily on deep-dive, bottoms-up

microeconomic analysis, at the company level, to assess investment opportunities. The

strategy will rely on proprietary multi-factor models and security screening models to help

identify potential investment securities. Selected securities will then be subjected to rigorous

analysis of potential risks and various upside and downside catalysts.

Fundamental analysis is used to identify certain attractive characteristics of companies. Such

characteristics may include: high levels of Free Cash Flow; strong management teams;

consistent, investor-friendly capital allocation policies; robust balance sheets, with attractive

ratios of cash flow to debt service requirements; participation in recently challenged

industries that present reasonable prospects for cyclical recovery; potential for long-term

growth; significant tangible assets in relation to enterprise values; high returns on invested

equity and capital; high operating margins; a strong business competitive moat; long-term

market pricing power for the company’s goods and/or service; and the production of essential

services and products. Free Cash Flow is defined as the cash a company would generate

annually from operations after all cash outlays necessary to maintain the business, as a going

concern.

The CEO Strategy’s preference is to own a core group of quality securities available at a

discount to estimated intrinsic value. The strategy seeks to find securities which offer the

opportunity of long-term compounded gains, while also providing a quantifiable margin of

safety. These investments will be monitored via a multi-factor model and potentially

reviewed if deemed to be at risk. Additionally, investments would be reviewed upon

reaching fair value targets or sold if superior investment opportunities are found.

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All new investment opportunities will be evaluated in the context of their historical

correlations to the existing portfolio in an effort to reduce risk. The microeconomic analysis

used in security selection will also be complimented by the macroeconomic capabilities of

the BSC investment team, in both to assess macroeconomic risks and opportunities, as well

as in the investment review/candidate for sale selection process.

To help offset the concentration risk, investments will be designed to capitalize on the alpha

of the differentiated investment thesis (i.e., security specific catalysts), rather than on market

beta. Examples of CEO investment catalysts and opportunities include, but are not limited

to; spin-offs, turn-around investments, deleveraging situations, merger and acquisition take-

out candidates, reorganizations, dividend changes, misunderstood product launches,

company-specific cyclical opportunities, roll-ups, management change, industry

consolidation plays, disruptive technology opportunities, secular change opportunities, etc.

In the event the portfolio manager believes that there are not adequate investment

opportunities available, the Concentrated Equity Opportunities Strategy would be able to

hold a significant amount of cash. It is the belief of the portfolio manager that the investment

set of available opportunities should not only include securities available today at current

prices but also the securities that are available in the future at future prices. The

Concentrated Equity Opportunities Strategy portfolio manager will, in that way, view the

available investment opportunity set along a time continuum to take advantage of differences

of security prices over time, as the market conditions change.

Additionally, the Concentrated Equity Opportunities will seek to be geographically

opportunistic by investing in liquid foreign securities (primarily U.S. Traded ADRs). Under

normal market conditions, the CEO Strategy would preferentially invest the majority of its

investments in U.S. based companies. However, in the event that few U.S.-based investment

opportunities were available for a protracted period, the CEO Strategy could

opportunistically seek a greater proportion of its concentrated portfolio in foreign ADRs.

IPC EQUITY INDEX STRATEGY(IES) METHODS OF ANALYSIS

The IPC Equity Index Strategy(ies) will be implemented with Exchange-Traded Products

(“ETPs”), particularly Exchange-Traded Funds (“ETFs”). The strategy attempts to replicate the

target index by investing all, or substantially all, of its assets in various ETFs. The ETF

securities selected are expected to have, in the aggregate, investment characteristics (based on

factors such as market capitalization and industry weightings), fundamental characteristics (such

as return variability) and liquidity measures similar to those of the underlying index. The

strategy’s ETF investment may or may not hold all of the securities in the underlying index.

This index strategy attempts to mirror the performance of the target index, for better or worse.

However, an index fund or strategy generally does not perform exactly like its target index. For

example, like all mutual funds and ETFs, index investment strategies have operating expenses

and transaction costs. Market indexes do not incur such expenses and cost, and, therefore, will

usually have a slight performance advantage over strategies that track them.

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The strategy may temporarily depart from its normal investment policies and strategies when

IPC believes that doing so is in the strategy’s best interest, so long as the alternative is consistent

with the strategy’s investment objective. For instance, the strategy may invest beyond its normal

limits in cash or cash equivalents Exchange-Traded Funds that are consistent with the strategy’s

objective when those instruments are more favorably priced or provide needed liquidity, as might

be the case when the strategy receives large cash flows that it cannot prudently invest

immediately.

Unlike many investment companies, this strategy does not try to “beat” the index it tracks and

does not generally seek temporary defensive positions when markets decline or appear

overvalued.

INVESTMENT STRATEGIES AND RISK OF LOSS

All investments are subject to inherent risks, and accordingly, you may lose money by investing

in a strategy as investments will fluctuate, reflecting day-to-day changes in market conditions,

interest rates, and numerous other factors that cause markets to fluctuate which may cause your

portfolio to decline over short- or long-term periods.

Risk may be defined as the chance that an investment’s or investment strategy’s actual return

will be different than expected. Risk includes the possibility of losing some or all of the original

investment. A fundamental idea in finance is the relationship between risk and return. The

greater the amount of risk that an investor is willing to take on, the greater the potential return.

The reason for this is that investors need to be compensated for taking on additional risk.

Market risk is defined as the risk of loss arising from adverse changes in market rates and

prices, such as interest rates, foreign currency exchange rates, commodity prices, and other

relevant market rate or price changes (e.g., equity prices). The price of a stock, bond or other

security may drop in reaction to tangible and intangible events and conditions. This type of risk

is caused by external factors independent of a security’s particular underlying circumstances.

There can be no assurance that any investment, investment strategy or the investment asset

allocation selected will be profitable or successful in achieving its investment objectives. Clients

should understand the primary risk of investing in securities involves a loss of capital and should

be prepared to bear such a loss. Investment in securities comes with inherent risks in exchange

for a return on that investment as described above. In general, an investor may lose a portion of

their principal and experience volatility in the value of that principal over time for various

reasons as outlined below. This list is representative of many risks and is not necessarily a

complete indication of all the risks a Client may assume.

1. Fixed Income Securities (Bonds)

Fixed income securities are debt obligations of the issuer. The market value (price) of

those obligations can vary over time for various reasons such as those listed below:

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a. Fixed Income Securities: An investment strategy that invests in fixed income

securities includes corporate bonds, government bonds, municipal bonds, other debt

instruments, Exchange-Traded Funds and mutual funds that invest in these securities.

Issuers generally pay a fixed, variable or floating interest rate and must also repay the

amount borrowed at maturity. Some debt instruments, such as zero-coupon bonds, do

not pay current interest, but are sold at a discount from their face value. Prices of

fixed income securities generally decline when interest rates rise and rise when

interest rates fall.

Investment strategies that invest in U.S. Government securities include securities

issued or guaranteed by the U.S. Treasury; issued by a U.S. Government agency; or

issued by a Government-Sponsored Enterprise (GSE). U.S. Treasury securities

include direct obligations of the U.S. Treasury (i.e., Treasury bills, notes and bonds).

U.S. Government agency bonds are backed by the full faith and credit of the U.S.

Government or guaranteed by the U.S. Treasury (such as securities of the

Government National Mortgage Association (GNMA or Ginnie Mae)). GSE bonds

are issued by certain federally-chartered but privately-owned corporations, but are

neither direct obligations of, nor backed by the full faith and credit of, the U.S.

Government. GSE bonds include: bonds issued by Federal Home Loan Banks

(FHLB), Federal Farm Credit Banks, Federal Home Loan Mortgage Corporation

(FHLMC or Freddie Mac) and the Federal National Mortgage Association (FNMA or

Fannie Mae).

b. Duration Risk: Duration is a measure of sensitivity of the change in market value to

a given change in interest rates over time. Longer duration bonds, which typically

have longer maturities, have more sensitivity to interest rate changes than short

duration bonds. Additionally, longer-term debt and zero-coupon bonds are more

sensitive to interest rate changes than debt instruments with shorter maturities.

c. Convertible Security Risk: Securities that may be converted into other securities

may be subject to the market risks of equity securities, the risks of debt securities, and

other risks. The market value of securities tends to decline as interest rates increase.

Their value also tends to change whenever the market values of underlying securities

fluctuate.

d. Credit Risk: Fixed income securities are also subject to credit risk, which is the

chance that an issuer will fail to pay interest and/or principal on time. Many fixed

income securities receive credit ratings from Nationally Recognized Statistical Rating

Organizations (NRSROs). These NRSROs assign ratings to securities by assessing

the likelihood of issuer default. Changes in the credit strength of an issuer may

reduce the credit rating of its debt investments and may affect their value. High-

quality debt instruments are rated at least AA or its equivalent by any NRSRO or are

unrated debt instruments of equivalent quality. Issuers of high-grade debt instruments

are considered to have a very strong capacity to pay principal and interest.

Investment-grade debt instruments are rated at least Baa or its equivalent by any

NRSRO or are unrated debt instruments of equivalent quality. Baa-rated securities

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are considered to have adequate capacity to pay principal and interest, although they

also have speculative characteristics. Lower-rated debt securities tend to pay higher

interest and are more likely to be adversely affected by changes in economic

conditions than higher-rated debt securities.

An issuer suffering an adverse change in its financial condition could cause a

lowering of the credit quality of a security, leading to greater price volatility of the

security. A lowering of the credit rating of a security may also offset the security’s

liquidity, making it more difficult to sell. Investment strategies investing in lower

quality debt securities, although generally having a higher yield, are more susceptible

to these problems and their value may be more volatile.

Non-Investment Grade Debt: Credit risk is more pronounced for investments in

fixed-income securities that are rated below Investment Grade or which are of

comparable quality. The risk of default may be greater and the market for these

securities may be less active, making it more difficult to sell the securities at

reasonable prices, and also making valuation of the securities more difficult.

Additional Risks Associated with Municipal Securities: Income from municipal

bonds could be declared taxable because of unfavorable changes in tax laws, adverse

interpretations by the Internal Revenue Service or state tax authorities, or

noncompliant conduct of a bond issuer. Certain municipal bonds may generate

income that is subject to the alternative minimum tax.

2. Equity Securities (Stocks)

Stocks generally represent an ownership share in a company. The market value (price) of

those ownership shares fluctuate over time.

a. Equity Securities Risk: Equity securities include common stocks, preferred stocks,

convertible securities, mutual funds and Exchange-Traded Funds that invest in these

securities. Equity markets can be volatile. Stock prices rise and fall based on

changes in an individual company’s financial condition and overall market

conditions. Stock prices can decline significantly in response to adverse market

conditions, company-specific events, and other domestic and international political

and economic developments. Additionally, the investment strategy’s target index

may, at times, become focused in stocks of a particular sector category, or group of

companies, which could cause the strategy to underperform the overall stock market.

b. Loss of Capital: An owner of stock can lose some or all of their investment.

c. Risk Related to Company Size: Investment strategies that include investing in mid,

small and micro capitalization companies generally involves greater risks than

investment strategies investing in larger, more established companies, and possibly

have a higher probability of experiencing a loss of principal in exchange for

potentially higher growth. The market may value companies according to size or

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market capitalization rather than financial performance. As a result, if mid-cap,

small-cap or micro-cap investing is out of favor, these holdings may decline in price,

even though their fundamentals are sound. They may be more difficult to buy and

sell, subject to greater business risks and more sensitive to market changes than larger

capitalization securities. However, the pattern of their volatility may be different than

those of larger stocks; and, therefore, may have diversification benefits, possibly

reducing the overall portfolio volatility.

d. Foreign Securities Risk: Investments in foreign securities involve certain risks that

differ from the risks of investing in domestic securities. Adverse political, economic,

social or other conditions in a foreign country may make the securities of that country

difficult or impossible to sell. It is more difficult to obtain reliable information about

some foreign securities. The costs of investing in some foreign markets may be

higher than investing in domestic markets.

However, some of this investment risk may be reduced by investing in

foreign securities typically through American Depository Receipts

(“ADRs”). ADRs are certificates deposited with a U.S. bank that

represent the right to own a foreign security. Since ADRs are traded in

U.S. markets and the issuers are subject to the same auditing, accounting

and financial reporting standards as domestic securities, owning ADRs has

advantages over owning other foreign securities.

Other risks an investor should be aware of when selecting an investment

strategy that invests in foreign or international securities are:

i. Currency Risk – the risk that the U.S. Dollar’s exchange rate

versus other currencies may change, thus increasing or decreasing

the value of the stock once exchanged back into U.S. Dollars.

ii. Political or Sovereign Risk – Countries outside the U.S. have

different legal, economic and political structures that can affect the

value of investments in those countries.

iii. Emerging Markets: Investment strategies that invest in emerging

international markets may experience additional risks beyond those

listed above. Emerging markets may have less developed legal,

economic and political structures that are in the process of

emerging, and, therefore, may experience additional volatility

beyond that of more economically developed countries.

Economies in Emerging Markets generally are heavily dependent

upon international trade and, accordingly, have been, and may

continue to be, affected adversely by trade barriers, exchange

controls, managed adjustments in relative currency values and

other protectionist measures imposed or negotiated by the

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countries with which they trade. These economies also have been,

and may continue to be, affected adversely by economic conditions

in the countries in which they trade. Because of the special risks

associated with investing in Emerging Markets, investments in

such securities should be considered speculative. Investors in such

strategies are advised to consider carefully the special risks of

investing in emerging market securities.

The risk also exists that an emergency situation may arise in one or

more developing markets, as a result of which trading of securities

may cease or may be substantially curtailed and prices for an

investment strategy’s securities in such markets may not be readily

available. Investors should note that changes in the political

climate in Emerging Markets may result in significant shifts in the

attitude to the taxation of foreign investors. Such changes may

result in changes to legislation, the interpretation of legislation, or

the granting to foreign investors the benefit of tax exemptions or

international tax treaties. The effect of such changes can be

retrospective and can (if they occur) have an adverse impact on the

investment return of the investment strategy.

e. Concentration Risk and Non-Diversification Risk: A strategy is considered to be

“non-diversified,” which means that the strategy can invest a greater percentage of its

assets in the securities of fewer issuers than a diversified portfolio. The strategy may

also have a greater percentage of its assets invested in particular industries than a

diversified portfolio, exposing the portfolio to the risk of unanticipated industry

conditions, as well as risks particular to a single company or the securities of a single

company. Additionally, a non-diversified portfolio generally is more volatile, and the

portfolio may have a greater risk of loss if the portfolio redeems shares during a

period of high volatility. Lack of broad diversification also may cause the portfolio to

be more susceptible to economic, political, regulatory, liquidity or other events than a

diversified portfolio.

f. Special Situation Risk: Investments in special situations may involve greater risks

when compared to other strategies due to a variety of factors. Mergers,

reorganizations, liquidations or recapitalizations may not be completed on the terms

originally contemplated, or may fail. Expected developments may not occur in a

timely manner, or at all. Transactions may take longer than originally anticipated,

resulting in lower annualized returns than contemplated at the time of investment.

Furthermore, failure to anticipate changes in the circumstances affecting these types

of investments may result in permanent loss of capital.

3. REITs

a. REITs: Real estate investment trusts, known as REITs, are entities that invest in

different kinds of real estate or real estate related assets, including shopping centers,

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office buildings, hotels, and mortgages secured by real estate. There are basically

three types of REITs:

Equity REITs, the most common type of REIT, invest in or own real estate

and potentially make money for investors from rents they collect as well

as from price appreciation;

Mortgage REITs lend money to owners and developers or invest in

financial instruments secured by mortgages on real estate; and

Hybrid REITs are a combination of equity and mortgage REITs.

The Internal Revenue Code lists the conditions a company must meet to qualify as a

REIT. For example, the company must pay 90% of its taxable income to

shareholders every year. It must also invest at least 75% of its total assets in real

estate and generate 75% or more of its gross income from investments in, or

mortgages on, real property.

Investing in real estate and real estate investment trusts (REITs) involve special risks,

such as: limited liquidity, changes in tax laws, tenant turnover or defaults,

competition, casualty losses and use of leverage. Real estate values may fluctuate

based on economic and other factors. REITs are dependent upon management skills

and are not diversified. When interest rates decline, the value of a REITs investment

in fixed-rate obligations can be expected to rise. Conversely, when interest rates rise,

the value of a REITs investment in fixed-rate obligations can be expected to decline.

Mortgage REITs may be affected by the quality of any credit extended to them. An

investment in real estate or REITs may not be suitable for all investors, and there are

no assurances that the investment objectives of any real estate program or strategy

will be attained.

4. Exchange-Traded Products

a. Exchange-Traded Products (“ETPs”) are a type of security that is derivatively-

priced and which trades intra-day on a national securities exchange. Derivatively-

priced ETPs means the value is derived from other investment instruments such as a

commodity, currency, share price or interest rate. Generally, Exchange-Traded

Products are benchmarked to stocks, commodities, indices or they can be actively

managed funds. Exchange-Traded Products include Exchange-Traded Funds

(“ETFs”), Exchange-Traded Vehicles (“ETVs”), Exchange-Traded Notes (“ETNs”)

and certificates.

b. Exchange-Traded Funds (“ETFs”) Risk: ETFs are open-end investment

companies, unit investment trusts or depository receipts that may hold portfolios of

bonds, stocks, commodities and/or currencies that are commonly designed, before

expenses, to closely track the performance and/or yield of (i) a specific index, (ii) a

basket of securities, commodities or currencies, or (iii) a particular commodity or

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currency. The types of indices sought to be replicated by ETFs most often include

domestic equity indices, fixed income indices, sector indices and foreign or

international indices. ETF shares are traded on exchanges and are traded and priced

throughout the trading day. ETFs permit an investor to purchase a selling interest in a

portfolio of stocks throughout the trading day. Because ETFs trade on an exchange,

they may not trade at Net Asset Value (“NAV”), which is the value of the underlying

securities after expenses. Sometimes, the prices of ETFs may vary significantly from

the NAVs of the ETFs’ underlying securities. Additionally, if an investor decides to

redeem ETF shares rather than selling them on a secondary market, the investor may

receive the underlying securities which must be sold in order to obtain cash.

Investment style risk is the chance that returns from ETFs that represent large-

capitalization stocks will trail returns from the overall stock market. ETFs, as well as

large-cap stocks, tend to go through cycles of doing better – or worse – than other

segments of the stock market or the stock market in general. These periods have, in

the past, lasted for as long as several years.

Because ETF Shares are traded on an exchange, they are subject to additional risks:

S&P 500 ETF Shares as listed for trading on NYSE Arca (New York

Stock Exchange Archipelago Exchange – an exchange on which both

stocks and options are traded). ETF Shares are bought and sold on the

secondary market at market prices. As discussed above, the NAV may

differ from the market price. Thus, one may pay more or less than NAV

when one buys S&P 500 ETF Shares on the secondary market, and may

receive more or less than NAV when those shares are sold.

Although S&P 500 ETF Shares are listed for trading on NYSE Arca, it is

possible than an active trading market may not be maintained.

Trading of S&P 500 ETF Shares on NYSE Arca may be halted by the

activation of individual or market-wide “circuit breakers” (which halt

trading for a specific period of time when the price of a security or overall

market price decline by a specified percentage). Trading of S&P 500 ETF

Shares may also be halted if:

i. The shares are delisted from NYSE Arca without first being listed

on another exchange; or

ii. NYSE Arca officials determine that such action is appropriate in

the interest of a fair and orderly market or to protect investors.

Also, ETFs consisting of bonds and bond funds will generally decrease in value as

interest rates rise. ETFs and Exchange-Traded Notes (“ETNs”), particularly those

consisting of commodities, exhibit their own unique potential risk as these markets

have historically been extremely volatile. For example, an ETN’s indicative price is

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calculated by the issuer and could differ “sometimes significantly” from the market

value. Inverse ETF funds should lose money when their benchmark indexes rise – a

result that is opposite from traditional mutual funds.

Inverse ETF funds also entail certain risks, including inverse correlation, leverage,

market price variance and short sales risks. Generally, such an exchange-traded fund

(ETF) is constructed by using various derivatives for the purpose of profiting from a

decline in the value of an underlying benchmark. Investing in these ETFs is similar to

holding various short positions, or using a combination of advanced investment

strategies to profit from falling prices. Inverse ETFs are also known as a “Short ETF”

or “Bear ETF.” One advantage is that these ETFs do not require the investor to hold

a margin account as would be the case for investors looking to enter into short

positions. As part of the strategies described above, BSC will use inverse ETFs as

part of its hedging strategy dependent upon BSC’s view of the markets.

5. Master Limited Partnerships

Master Limited Partnerships is an ownership unit in a publicly traded limited

partnership or master limited partnership (“MLP”). This trust gives the unit holder a

stake in the income generated by the partnership company. An MLP often distributes

all available cash flow from operations to unit holders after the deduction of

maintenance capital.

Partnership units are beneficial to investors because the MLP allows the company’s

cash distributions to circumvent the double taxation that would normally be imposed,

which generally means greater distributions for partnership unit holders. In an MLP,

the cash distributions of the company are taxed only at the unit holder level and not at

a corporate level. Another benefit of this type of investment is that because the units

are publicly traded, there is much more liquidity for investors compared to a

traditional partnership.

MLPs do present some risk. For example, MLP returns can be impacted if there is a

slide in the commodity or underlying business that supports the MLP. This means

that MLPs go up and down with the market and with commodity prices. MLPs don’t

always offer the same easy liquidity prominent with stocks, mutual funds, and

exchange-traded funds.

6. Political, Economic and Regulatory Risk

Changes in economic and tax policies, high inflation rates, government instability,

war or other political or economic actions or factors may have an adverse effect on a

strategy’s investments. Governmental and regulatory actions, including tax law

changes, may have unexpected or adverse consequences on particular markets,

strategies, or investments. Legislation or regulation may also change the way in

which the strategy itself is regulated. The Investment Manager cannot predict the

effects of any new governmental regulation that may be implemented on the ability of

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the strategy to invest in certain assets, or affect the Investment Manager’s ability to

access financial markets, and there can be no assurance that any new governmental

regulation will not adversely affect a strategy’s ability to achieve its investment

objective.

7. Management Risk

Management Risk is the risk the strategy may not fully replicate the underlying index.

It is subject to the risk that IPC’s investment management strategy may not produce

the intended results.

VOTING CLIENT SECURITIES (PROXY VOTING POLICY SUMMARY)

Within the MMSP, Independent Portfolio Consultants, Inc., as a matter of policy and as a

fiduciary to our Clients, has responsibility for voting proxies consistent with the best economic

interests of the Clients. IPC’s policy and practice includes the implementation of a Proxy Voting

Service for corporate actions and Client proxies. Clients may retain the right to vote any proxies

or take action relating to specified securities held in the Account provided the Client gives

timely, written prior notice to IPC. Clients are provided the option to vote their proxies in the

Investment Management Agreements and Investment Advisory Agreements. IPC makes the

information available to Clients about the voting of proxies for their portfolio securities upon

request. A copy of the Policy and voting information may be obtained by writing to:

Independent Portfolio Consultants, Inc., Attention: Compliance, 5002 T-Rex Avenue, Suite 225,

Boca Raton, FL 33431.

IPC may be unable to vote, or may decide not to vote, a proxy on behalf of one or more Clients.

For example, a vote might not be entered because the shares are on loan as part of the Client’s

securities lending program. Certain countries require shareholders to stop trading securities for a

period of time before and/or after a shareholder meeting (“share blocking”). Generally, IPC does

not vote securities in countries that require share blocking because it potentially limits IPC from

exercising IPC’s investment discretion. In addition, IPC may be unable to complete a thorough

and informed review of the proxy materials if the issuer does not provide the information in a

timely fashion or if translated materials are not available. IPC may determine that the cost of

executing the proxy exceeds the benefits to the Client’s account. As a general matter, IPC does

not vote securities in countries that require the Client to execute a power of attorney.

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7. Client Information Provided to Portfolio Managers ******************************************************************************

INVESTMENT POLICIES AND INVESTMENT MANAGER

COMMUNICATIONS

For each account, an investment management agreement is signed between the Client and the

Investment Manager or IPC as the Overlay Portfolio Manager. This agreement outlines the

terms by which the Client’s account is to be managed. Clients also complete an Investor Profile,

along with the Client’s Statement of Investment Policy. This includes such information as: the

purpose of the account, the Client’s primary investment objective, tolerance for risk, liquidity

needs, age, occupation, income, net worth and other special considerations that would impact

how the Client desires the account to be managed. This information is passed on to the

Investment Manager(s) selected by the Client. However, the MMSP accounts are managed by

IPC and no information is provided to the Model Manager(s) or Sub-Adviser(s).

If a Client’s financial situation or investment objectives change and a Client wants to modify

their investment objectives and or account restrictions at any time, the Client should notify their

Investment Executive or IPC. On a quarterly basis, the Client will be reminded to provide their

Investment Executive with any information regarding significant changes to their financial

condition and other information that may change their investment objectives. IPC will

communicate this to the Client’s Investment Manager(s) or Overlay Portfolio Manager. This

information typically requires the completion of a new Investor Profile and may require an

update to the Client’s Statement of Investment Policy which, if changed, will be provided to the

Investment Manager.

Clients will also receive a quarterly performance report, which the Client can review with their

Investment Executive as often as is determined to be necessary, but at least annually. This report

can be used to assist the Client in monitoring the results of their investment account in relation to

their particular goals and objectives stated in their Statement of Investment Policy. The Client’s

Investment Executive and the IPC Ongoing Consulting Group will consult with the Client

concerning the Investment Managers’ investment performance, and assist the Client in making

future investment management decisions, based both on account performance and upon changes

in their overall financial circumstances. IPC’s Ongoing Consulting Group works with the

Investment Executive to set up and coordinate Client reviews of their IMAP accounts. If deemed

appropriate, the Investment Executive and IPC may recommend that the Client select a new

Investment Manager or Model Manager strategy at no additional cost.

IPC provides Investment Managers but not Model Managers with electronic access to Client

portfolio holdings on a regular basis. Investment Managers may access Client portfolio

statements that are balanced and reconciled monthly. Additionally, the electronic access enables

the Investment Manager to view Client accounts daily and includes a list of the Client’s holdings,

a cash ledger of activity in the account for the current month, as well as a performance report for

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the Client’s portfolio. Also, IPC provides the Investment Manager with access to an electronic

copy of the Client’s quarterly portfolio report.

******************************************************************************

8. Client Contact with Portfolio Managers ******************************************************************************

A Client may choose to meet or speak with their Investment Manager directly to review their

account objectives and performance. The Investment Executive, through the IPC Ongoing

Consulting Group, coordinates the conferences or meetings with their Investment Manager(s).

The Investment Manager is the person who is making the investment decisions pertaining to the

Client’s account on a day-to-day basis. Clients may communicate directly with their Investment

Manager(s), consistent with the reasonable constraints of the Investment Manager’s business.

However, the MMSP services described above in Section 4 do not provide the Client with the

following services:

direct contact with the Sub-Adviser or Model Manager

an extensive amount of individual portfolio customization, in-depth, coordinated tax

planning or

the ability to consider previously existing holdings.

For these accounts, the Client’s Investment Executive and IPC Consultant will meet or

conference with the Client, at the Client’s request, to review their account objectives and

performance. They will also work with the Client to develop their objectives and investment

strategies. Additionally, Client’s input is primarily limited to decisions about: the investment

strategy(ies) selected, asset allocation, target amount of cash equivalents in the investment policy

and the individual security and any other reasonable restrictions on the account. While an initial

Client presentation, via a telephone conference call, may be provided by a specific Model

Manager, ongoing Client consultation will be provided primarily by an IPC Consultant and the

Investment Executive or Wealth Manager.

******************************************************************************

9. Additional Information ******************************************************************************

DISCIPLINARY INFORMATION

IPC is required per the Security and Exchange Commission Rule 206(4)-4 to disclose in the

Brochure material facts about any legal or disciplinary events of IPC or its management

personnel. IPC does not have any legal or disciplinary events to report.

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OTHER FINANCIAL INDUSTRY ACTIVITIES & AFFILIATIONS

Independent Portfolio Consultants, Inc. is a registered investment adviser with the Securities and

Exchange Commission and is primarily engaged in the managed assets business. IPC, and its

executive officers, spend the majority of their time with these business activities. IPC also has

entered into a Brokerage Services Agreement with Managed Account Services, LLC (“MAS”)

and most persons associated with IPC who provide investment advice to Clients are also

registered representatives of MAS. MAS is actively engaged in business as a securities broker-

dealer and acts as the primary executing broker for most of MAS’ brokerage and advisory

activities. In this capacity, MAS performs, among other services, trade executions and clearing

support, in addition to related administrative and client services. The proportion of time spent on

each of these activities by IPC representatives is not determinable.

INVESTMENT DISCRETION

IPC provides discretionary investment advisory services to Clients via equity, balanced and fixed

income account management through its MMSP services. Prior to a Client retaining IPC to

manage all or part of their financial assets, a careful review is conducted to determine the Client’s

objectives and risk tolerances. IPC then develops an investment plan or statement of investment

policy for the Client based upon the Client’s investment goals, objectives and financial

circumstances. Once accepted, the Client enters into an Investment Advisory Agreement with

IPC. Thereby, Client grants IPC, as the Overlay Portfolio Manager or Portfolio Manager

(“investment manager”) for the account, full discretion in the management of the investments of

the Account. Client authorizes IPC, without prior consultation with, or approval from, the Client

to invest and reinvest the assets in the Account.

Both cash and securities may be used to fund accounts in MMSP. However, it is the intent of

IPC that all securities so received be liquidated prior to, or simultaneous with, the purchase of

securities for the account.

CODE OF ETHICS

IPC has adopted a Code of Ethics, in compliance with Rule 204A-1 of the Investment Advisers

Act of 1940. The Code of Ethics, among other things, sets ethical standards and requires

compliance with the securities laws, safeguards material, nonpublic information about Clients’

transactions and portfolio holdings, and requires initial and annual reports of securities holdings

for access persons. This Code of Ethics sets forth the rules for business conduct and personal

investing activities of IPC’s employees.

The provisions of the Code of Ethics apply to all IPC employees. A copy of the Policy may be

obtained by writing to: Independent Portfolio Consultants, Inc., Attention: Compliance, 5002 T-

Rex Avenue – Suite 225, Boca Raton, FL 33431.

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PARTICIPATION OR INTEREST IN CLIENT TRANSACTIONS &

PERSONAL TRADING

IPC’s employees and officers may maintain positions in, or buy or sell the same securities or

related options as Clients buy or sell. In cases such as this, employees and officers of IPC would

have an interest in the success of a security that may be recommended to, owned by, sold for or

purchased for a Client.

Employee trades are reviewed, so that no employee’s trade execution receives a better execution

price than a Client’s for the same security traded on the same day in an MMSP account. IPC

employees are not permitted to buy or sell any securities that are included on an “IPC Restricted

Security List” (security trades placed by IPC acting in the capacity of a portfolio manager) for a

24-hour period. However, this restriction does not apply to employee accounts under contract

with, and managed by, a professional Investment Manager. The IPC Portfolio or Overlay

Managers will distribute the “IPC Restricted Security List” via an office-wide e-mail prior to

trading securities for an MMSP managed investment account. The time stamp and date on the e-

mail begins the 24-hour restriction. Employee trades will be reviewed and, if an employee

traded a security on the “IPC Restricted Security List,” the employee trade may be busted to an

error account, on a case-by-case basis, based upon the review of the previous day’s trades, except

as noted above. The intent is to avoid potential conflicts of interest that may arise in the trading

activities on behalf of Clients.

Brokerage Executions

Best Execution

As an investment advisory firm, Independent Portfolio Consultants, Inc. (“IPC”) has a

fiduciary and fundamental duty to seek best execution for Client transactions. While best

execution is difficult to define and even more challenging to measure, it is generally

accepted that it does not only mean achieving the best price but also includes many

factors, such as the characteristics of specific trades, the stock being traded, specific

needs of IPC Clients, conditions in the market at the time the order is placed and the

overall efficiency of market structure. In addition, IPC takes into account the fact that the

Client’s Program Fee covers trades executed by Managed Account Services, LLC and/or

its clearing entity, First Clearing, LLC (“MAS Trading”) (i.e., there are no additional

commissions charged if traded via MAS Trading).

Independent Portfolio Consultants, Inc., as a matter of policy, seeks to obtain best

execution for Client transactions, i.e., seeking to obtain not necessarily the lowest

commission but the best overall qualitative execution in the particular circumstances.

Brokerage Transactions

IPC’s policy is to not accept an advisory Client’s instructions for directing a Client’s

brokerage transactions to a particular broker-dealer.

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IPC sponsors wrap-fee programs in which transactions executed through Managed

Account Services, LLC would be free of commission charges to Clients. Investment

Managers in the programs are generally free to consider MAS Trading’s trading

capability versus other brokers’ trading capability. However, IPC anticipates that most

trades will be placed through MAS Trading for execution because of their execution

capabilities and because the wrap-fee paid by Clients covers trade charges only when

trades are executed through MAS Trading or their agents. Wrap-fees do not cover

charges resulting from trades effected with, or through, broker-dealers other than MAS

Trading or their agents nor mark-ups nor mark-downs by such other broker-dealers.

Further, it is expected that Investment Managers would typically consider trades executed

via MAS Trading are without commissions or retail mark-ups or mark-downs when

comparing the cost of trading for equity securities with other brokers. IPC would expect

such a comparison by an Investment Manager would generally result in a decision to

execute most trades through MAS Trading. However, some Investment Managers

believe they are able to obtain better execution and utilize step-out security transactions.

Clients should review the Investment Manager(s) Form ADV, Part 2A to learn if the

manager does execute step-out securities transactions and the criteria the Investment

Managers uses in selecting a broker-dealer to do so.

IPC has full discretion in the management of accounts in its capacity as a Portfolio

Manager or Overlay Portfolio Manager for the MMSP accounts. Clients direct IPC to

use the brokerage services offered by MAS Trading to effect transactions for the Client’s

account. IPC may use another broker or dealer to effect transactions for the account

when it reasonably believes it can achieve best execution by using such other broker or

dealer. However, because commissions for transactions executed by MAS Trading are

included in the wrap-fee the Client pays, IPC will not seek to negotiate commission rates

with MAS Trading. However, if IPC believes that it would not be able to achieve best

execution on a securities transaction by placing trades for the Client’s account through

MAS Trading, IPC may execute securities transactions through another broker-dealer,

and the account will pay separate transaction costs.

Consistent with the Manager’s fiduciary obligation, a Manager may decide to trade away

from MAS Trading in certain circumstances when the Manager expects that the net cost

to the Client (including all commissions and mark up and mark downs) will be lower than

it otherwise would have been. Trading away (also known as “stepping out”) entails the

use of a broker other than MAS to execute the trade. Managers use trade away

transactions in an effort to achieve the best net realized price when trading large blocks,

including ADR securities. Wrap-fee program accounts can benefit from these trade away

transactions because the Manager or Sub-Adviser maintains control over the transaction

from order placement through settlement. They can usually negotiate lower commissions

and ADR creation (or conversion) fees for large blocks than can be negotiated with MAS

Trading in the domestic or the local foreign country market. In addition, a Manager or

Sub-Adviser will seek to select a broker whose domestic or local foreign market

execution capabilities are at least as good as, and may be superior to, those of MAS

Trading.

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As stated above, when transactions are executed with other firms than MAS, the cost of

execution is embedded in the price of the security. For example, when a Manager trades

away and incurs a commission charge, the Client’s trade confirmation and the Client’s

account statement will not disclose the commission rate or the total amount of

commissions paid. IPC, as the Overlay Portfolio Manager, trades away, most of the time,

for the Global Equity ADR and the International Equity ADR strategies sub-advised by

Harding Loevner LP. IPC coordinates this trading with the sub-adviser in an attempt to

obtain better trade executions. Dependent upon the timing and where the security is

traded, these strategies pay commission rates ranging as follows: the international and

global security transaction rates range from 3.0 to 5.1 basis points, averaging out to

approximately 4.1 basis points when traded in the foreign local markets. Trades executed

in domestically traded markets range from 0 to 1.9 cents per share averaging

approximately 0.7 cents per share. In addition, The Boston Asset Management

Company, LLC (“TBCAM”), which manages two separately managed account (“SMA”)

strategies, the U.S. Large Cap Equity and the U.S. All-Cap Opportunistic Equity, in the

IPC Programs trades away most of the time. TBCAM believes its institutional trading

experience and block-trading capabilities provides the firm with the opportunity to obtain

better trade executions when trading away. The trade away commissions for 2016 varied.

A blended commission rate annually is likely to be around 2.8 to 2.9 cents per share and

rates will range from a low of .0025 (quarter of a penny per share) utilizing their trading

system to .04 per share on high-touch, full-service transactions. Algorithmic executions

are typically .0085 per share, crossing networks other than their internal trading system

range between .01-.02 per share, while high-touch, execution-only trades generally range

between .01-.02 per share. Any imbedded execution cost on trades done away from

MAS are in addition to the Program fees.

IPC’s policy is to not engage in principal or agency cross-transactions. An agency cross-

transaction is defined as a transaction where a person acts as an investment adviser in

relation to a transaction in which the investment adviser, or any person controlled by or

under common control with the investment adviser, acts as broker for both the advisory

Client and for another person on the other side of the transaction (SEC Rule 206(3)-2(b)).

Agency cross-transactions typically may arise where an adviser is dually registered as a

broker-dealer or has an affiliated broker-dealer.

Also, as a matter of policy, IPC does not have any formal or informal arrangements or

commitments to use research, research-related products and other services obtained from

broker-dealers, or third parties, on a soft dollar commission basis.

IPC Trade Aggregation and Allocation

The aggregation or blocking of Client transactions allows an Investment Manager to

execute transactions in a more timely, equitable and efficient manner. Blocking is done

in an attempt to achieve a better overall price execution for the Client.

As a matter of policy, IPC’s allocation procedures must be fair and equitable to all

Clients, with no particular group or Client(s) being favored or disfavored over any other

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Clients. IPC’s policy prohibits allocation of trades in a manner that favors IPC’s

proprietary accounts or any particular Client(s) or group of Clients.

IPC has adopted a policy for the fair and equitable allocation of transactions. The policy

is as follows: For Client accounts managed by the Overlay Portfolio Manager on a

discretionary basis, IPC may aggregate, block, or bunch Client trades, provided that the

following conditions are met: (1) IPC will not aggregate transactions, unless it believes

that aggregation is consistent with its duty to seek best execution for its Clients; (2) no

advisory Client will be favored over any other Client; (3) each Client that participates in

an aggregated order will participate at the average share price for a given order, in a

given security, on a given business day, and (4) if the aggregated order is filled in its

entirety, it will be allocated proportionately to receive the same allocation as the

proportion of the total pre-trade allocation at the average price. For remaining portions

that are filled on the following business day, Clients will receive the same allocation as

the proportion of the total pre-trade allocation at the average price of the business day.

Investment Managers, Sub-Advisers or IPC (“Manager(s)”) may trade foreign ordinary

shares in their principal local market if the liquidity of American Depositary Receipts

(“ADRs”) in the US market is, in their estimation, insufficient to accommodate the total

amount of ADRs they wish to trade without significant impact on the market price. A

Manager will typically use an unaffiliated broker or MAS Trading to execute foreign

ordinary share trades in the local market for delivery to (or receipt from) the Depositary

for creation (or conversion) of ADRs. This approach leaves the selection of and control

over the executing broker with the Manager, including the negotiation of the local

broker’s commissions and the Depositary’s ADR creation (or conversion) fee. Such

commissions and fees are incorporated in the net price at which the ADR is delivered by

the broker to (or from) the Client’s account. Depending on the quality of the local market

execution and the rates negotiated for the services of the brokers and the Depositary, the

net price of the ADR to the Client’s account could be more favorable or less favorable

than if the ADR had been traded directly in the US market.

Error Correction Practices

As a fiduciary, IPC has the responsibility to effect orders correctly, promptly and in the

best interests of IPC’s Clients. In the event an error occurs in IPC’s handling of any

MMSP transactions, due to IPC’s actions, or inaction, or actions of others, IPC’s policy is

to seek to identify and correct any errors as promptly as possible, without disadvantaging

the Client.

Profits and losses that result from the correction of erroneous trades made via MAS

Trading are absorbed by Managed Account Services, LLC’s error accounts. Losses that

are incurred as a result of an error made by an Investment Manager or IPC are passed on

to the Investment Manager or IPC. If the resulting balance in Managed Account

Services, LLC’s error accounts at the end of the year is a profit, the amount might be

considered additional compensation to Managed Account Services, LLC.

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Exceptions to the general rule of moving errors to the error account can be made for

ERISA accounts in which case gains, resulting from the error correction, may be awarded

to the Client. This is only permitted to the extent that the trade does not violate legal or

Client guidelines.

REVIEW OF CLIENT ACCOUNTS

On a daily basis, account activity is reviewed by IPC for exceptions (entries that are not

consistent with the Client account) and violations of Client restrictions. Each IMAP account is

balanced and reconciled, at least monthly, against the Client’s custodian’s statement. The IPC

Manager of Advisory Operations is responsible for overseeing this activity.

Separately Managed Accounts

On a quarterly basis, the IPC’s Consulting Group reviews each actively managed account

relationship. These individuals review accounts to look at asset allocation, holdings,

performance, as well as industry, sector and issue concentrations and for general adherence

to an Investment Manager’s stated style. Any discrepancies noted will be reviewed with the

Investment Manager. Other items reviewed may include the risk profile of the portfolio, the

Client’s objectives and performance versus a comparable benchmark. The IPC Manager of

Advisory Operations & Performance Analyst is also responsible for reviewing the

performance for all accounts. Any account performance that significantly varies from a

comparable benchmark is flagged. Accounts are also reviewed for dispersion characteristics.

An inexplicable or unsatisfactory response from the Investment Manager may subject them

to a review.

Account reviewers follow IPC’s policies and procedures that are reasonably designed to

detect or prevent violation of a Client’s investment guidelines. When an issue is raised

during a review, an inquiry must be made until such issue is resolved. Upon further

examination, and if warranted an in-depth review may be followed by a discussion with the

Wealth Manager, Investment Executive and/or Investment Manager and, finally, with the

Client.

IPC’s Ongoing Consulting Group will review the Client’s investment objectives and, on at

least an annual basis, IPC will inquire if his or her financial situation or investment objectives

have changed. The Client’s Wealth Manager or Investment Executive, through

communication with the Client, is expected to monitor the management of the account’s

assets for appropriateness, given the Client’s stated investment objectives and risks.

Multiple Manager Strategy Portfolio Accounts

On a daily basis, the Multiple Manager Strategy Portfolio (“MMSP”) accounts are reviewed

for exceptions and restrictions by IPC. Each account is balanced and reconciled at least

monthly, if not daily, against the Client’s custodian. On a monthly basis, MMSP accounts

are also reviewed for performance dispersion. If there is unexpected dispersion among Client

accounts utilizing the same strategy, the transactions and/or security positions may be

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reviewed to determine the reason for the unexpected dispersion. On a quarterly basis, IPC’s

composite strategy performance results are compared to the performance results that the

Model Manager Models achieved in their direct managed accounts which are reported in the

Model Manager’s composite results. Any significant divergence of MMSP strategy results,

as compared to Model Manager composite results, will be reviewed in order to determine if

the divergence is logical, or if the divergence may be due to a problem with the

implementation of the Model Manager’s Model portfolio. Also, accounts are reviewed to

compare the current asset allocation between cash, equities and bonds to the Client’s target

allocation as determined by the Statement of Investment Policy (“SOP”). When an asset

class is out of the predefined allowable range, the MMSP Overlay Portfolio Manager will

work to bring the asset allocation back towards its target allocation.

Client Reporting

IPC provides the Wealth Managers, Investment Executives and their Clients a quarterly

report that includes portfolio analysis, portfolio performance, asset allocation, portfolio

holdings, capital gains and losses report and a cash ledger detailing account transactions for

the quarter. MMSP Clients are provided a quarterly report that includes portfolio

performance, asset allocation, portfolio holdings, capital gains and losses and contributions,

withdrawals and income transactions for the quarter. However, IPC will not disclose

information about the Client to the Wealth Managers, Investment Executives and others

except as disclosed in IPC’s Privacy Policy. IPC will share Client information with parties

who provide services to the Client’s accounts, including investment management firm(s).

The quarterly reports referred to above are generated following the quarters ending March

31st, June 30th, September 30th and December 31st.

Portfolio performance reporting is calculated and presented by IPC independently of the

Investment Manager(s) and Model Manager(s). This third-party consultation about

performance allows for a system of checks and balances for separately managed accounts

when reporting a Client’s performance. IPC follows industry standards in the calculation of

performance information for a Client’s account.

Clients generally receive confirmation of transactions, as well as monthly statements, from

Managed Account Services, LLC (produced by First Clearing) in accordance with their

IMAP agreement(s). If the Client has selected a custodian other than Managed Account

Services, LLC, the nature and frequency of reports will be determined by the agreement

between the Client and the custodian. IPC advises Clients to compare the information on

their IPC statement with the statement from their custodian. If Clients have any questions

about their statements, please call IPC Client Services at 561-912-1040 or 800-346-4570.

Although each client account is reconciled against the client’s custodian statement, at least

monthly, there may be a difference in account valuations between the statements. The

differences may be attributed as follows:

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Individual security pricing differences may be attributed to the different pricing

services utilized by IPC and the Custodian. This is particularly evident in the pricing

of fixed income securities and International ADRs.

Accrued Income is a factor as IPC statements include the accrued income in the

valuation of the account. Not all custodians include accrued income in the account

valuation. And, when they do, there may be a difference depending upon the pricing

services used in the valuation of individual securities.

IPC statements record trading transactions on the date the trade was transacted (trade

date) versus some custodian, such as bank custodians, which generally record trading

transactions on the day the trade settles (settlement date). For example, a manager

may place a trade on June 30. The trade does not settle until July 2. The IPC

statement will record the trade on trade date and will include the security position as

part of the account holdings as of June 30. However, some custodians, such as bank

custodians, may record the trade on settlement date and does not include the security

as part of the clients holding as of the June 30 month-end report.

Margin balances are reflected as part of the clearing entity’s statement, such that the

margin on the account is subtracted from the equity in the account to yield a net value

for the account. IPC statements do not reflect the margin balance, as IPC is paid on

the total value of the account that is being managed and not the net margin balance.

Unsupervised Holdings are client assets where neither the manager nor IPC has

discretion over such assets; however, client(s) may wish to see these assets as part of

their overall holdings. Unsupervised Holdings are not managed nor does the client

pay a management fee on such assets held in a portfolio. There are various reasons

why clients utilize Unsupervised Holdings. For example, clients may hold low cost-

basis stock, assets they do not intend to sell, restricted securities and so forth as

Unsupervised Holdings.

Electronic Access of Communications

As an IPC advisory Client, the Client may consent to electronic delivery of account

communications (“Account Communications”) at IPC’s discretion. IPC will provide this

delivery of Account Communications by giving Clients access to their IPC account

information via IPC’s internet site utilizing an access password and account number. This

may include all current and future advisory account statements, trade confirmations, notices,

disclosures, regulatory communications, and other information, documents, data, and records

regarding Client’s IPC account. However, IPC is not able to provide electronic access or

delivery of the Client’s custodian statements and information. This consent to electronic

delivery, when given, will be effective immediately and will remain in effect unless and until

revoked. Clients may revoke this consent at anytime and request paper copies by writing to:

Independent Portfolio Consultants, Inc., Attention: Compliance, 5002 T-Rex Avenue – Suite

225, Boca Raton, FL 33431.

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CLIENT REFERRALS & OTHER COMPENSATION

Referral Arrangements

IPC enters into referral arrangements with individuals, including independent financial

planners, CPAs, registered investment advisers, Wealth Management Companies and broker

dealers who are not employees or agents of IPC. These arrangements are done in compliance

with the rules and regulations of the Investment Advisers Act of 1940, and the terms of the

arrangements are fully disclosed to the Client at the time the referral is made. Clients do not

typically pay a higher fee as a result of such payment arrangement.

Additional Compensation to IPC and its Affiliates

The primary compensation under IPC’s Managed Assets Programs is derived from the wrap-

fee. IPC does not require Investment Managers, Model Managers, Sub-Advisers or

investment companies participating in its programs to participate in its educational and

training conferences. However, IPC generally requires Investment Managers, Model

Managers, Sub-Advisers and investment companies choosing to participate in any of its

educational and training conferences to pay IPC for associated expenses. This money is used

to offset the cost of conferences and special meetings with the Investment Executives to

discuss such managers or companies. These payments may be considered additional

compensation to IPC and may create an incentive to direct more business to those companies.

However, IPC does not consider participation attendance when evaluating and

recommending Investment Managers for its programs.

Additionally, IPC has received payments from advisers that participate in IPC’s managed

asset programs. These payments may be for third party Wealth Management Company-

sponsored conference attendance, participation, speaker slots, sponsorship or exhibition fees;

educational and training fees; or fees tied to program participation or for a specific marketing

initiative within a program.

These payments may be considered additional compensation to IPC and may create an

incentive to direct more business to those advisers. However, IPC does not consider the

existence or level of payments from advisers in determining whether to select or retain an

adviser in the program. Advisers that participate in the conferences and training sessions as

described above may have an advantage over those managers that do not participate.

These payments to Sponsor vary from adviser to adviser depending on, among other things,

the amount of separate account client assets under the adviser’s management. These

payments to Sponsor may be as high as $20,000 per year per firm. Clients should review

their adviser’s brochure (Form ADV, Part 2A) for a description of business arrangements

between program sponsors and investment advisers.

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Custody

IPC does not maintain physical custody of Clients’ funds or securities. Clients must select

their own independent, third-party qualified custodian to maintain the Client’s account.

Client funds and securities will be held with a bank, broker-dealer, or other independent,

qualified custodian. The Client selects a custodian to have possession of the assets of the

account, to settle transactions for the account and to accept instructions from Investment

Managers and/or IPC regarding the assets in the account. In addition, these custodians

provide the Investment Managers and Overlay Portfolio Manager information on the

additions to, or withdrawals from, the account.

IPC will directly debit a Client’s account(s) for the payment of IPC’s advisory fees, as

authorized by the Client. This ability to deduct IPC’s advisory fees from a Client’s accounts

causes IPC to exercise limited custody over the Client’s funds or securities. IPC is not a

qualified custodian and the Client should know that IPC does not have physical custody of

Clients’ funds and/or securities.

Clients will receive account statements from the independent, qualified custodian(s) holding

Client funds and securities at least quarterly. The account statements from the Client’s

custodian(s) will indicate the amount of IPC’s advisory fees deducted from the Client’s

account(s) each billing period. The Client should carefully review account statements for

accuracy. IPC urges Clients to carefully review the account statements from the Client’s

qualified custodian promptly on receipt to determine that it completely and accurately states

all holdings in Client’s account and all account activity over the relevant time period. If the

Client has any questions or concerns, or if the Client notes any discrepancies between the

custodian’s and the IPC’s statements, IPC urges the Client to contact IPC and the Client’s

qualified custodian. Please note that the information on the statements from IPC and the

statements from the Client’s qualified custodian may differ slightly for reasons including:

the use of different pricing sources; the use of trade-date versus settlement-date accounting

and timing differences in the posting of trades, corporate actions, dividend payments and tax

reclaims.

If the Client has a question regarding the Client’s account statement or if the Client did not

receive a statement from the Client’s custodian, please contact Russell Lowe, Managing

Director at 561-912-1080.

IMAP accounts are generally held through Managed Account Services, LLC (“MAS”) as

introducing broker-dealer. MAS uses First Clearing, LLC (“First Clearing”) member

NYSE/SIPC, on a fully-disclosed basis for clearing and custody services. First Clearing,

LLC, a non-bank affiliate of Wells Fargo & Company, produces account statements and

trade confirmations, and provides IPC with other recordkeeping, operational, clearing and

custodial services. First Clearing, LLC is a member of FINRA, the Securities Investor

Protection Corporation (“SIPC”), the New York Stock Exchange, the NASDAQ Stock

Market and other major regional stock exchanges. Clients who maintain securities accounts

with Managed Account Services, LLC, through First Clearing, are protected by the SIPC up

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to $500,000 for cash and securities, with a limit of $250,000 for cash awaiting reinvestment.

For additional security, First Clearing also provides coverage in excess of the $500,000 SIPC

limits through its policy with Lexington Insurance Company, an AIG Company, the

underwriter of this additional protection. This additional protection covers missing securities

and cash in Client brokerage accounts up to a firm aggregate limit of $1 billion, of which

$1.9 million may cover cash awaiting reinvestment at the individual account level. However,

this protection does not cover market losses. Assets held at outside custodians are not

protected by First Clearing’s SIPC coverage or the additional insurance. Additionally,

custody fees may be incurred if a custodian other than MAS is used. IPC does not maintain

physical custody of Clients’ funds or securities.

CONFLICTS OF INTEREST

IPC recognizes that there may be potential conflicts of interest between IPC’s interests and a

Client’s interests if, for example, IPC may have a client who is a vendor or has some other

business relationship with IPC. IPC has adopted policies and procedures which IPC believes are

reasonably designed to manage the conflicts of interest created by those business relationships.

Additionally, if a Client is in need of certain types of products and/or services that are not offered

by IPC, IPC may refer the Client to various third-party entities that provide such products and/or

services, and may receive direct or indirect compensation through referral fees, commissions or

fee sharing, to the extent permitted by law, paid by the applicable third party. Examples of these

types of products and/or services may include, without limitation, risk management strategies,

hedging and diversification strategies.

IPC, and/or the Investment Executives, may recommend to the Client services or investments

that are offered or managed by the Investment Executive’s affiliate. In such cases, the affiliate

has a financial interest and will benefit from increased use or purchase of the service or

investment.

Many IPC Consultants who offer advisory services are also registered securities representatives

of MAS and may execute trades for Clients who also participate in IPC’s wrap-fee programs.

IPC Consultants may receive compensation from advisory or non-advisory Clients, resulting in a

potential conflict of interest. IPC anticipates, however, that most trades will be placed through

MAS and/or its clearing entity, First Clearing, LLC (“MAS Trading”), for execution because of

MAS’ Trading execution capabilities and because the wrap-fee paid by Clients covers trade

charges only when trades are executed through MAS Trading or their agents.

IPC, and its various relationships, provide a broad range of financial services to Clients. In

offering such services, IPC, its employees, officers and affiliates may give advice and take action

in the performance of their duties to certain of their Clients which may differ from advice given,

or the timing and nature of action taken, with respect to other advisory Clients’ accounts.

IPC may receive research reports and other materials from Investment Managers, Model

Managers, and Sub-Advisers participating in its programs. IPC uses this information in various

capacities in its business relationships with clients and advisors; however, IPC may provide all or

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some of this research to its Blue Shores Capital Division, which manages client assets on a

discretionary basis. IPC’s receipt of free research from Investment Managers, Model Managers,

and Sub-Advisers may cause IPC to favor such managers and advisers over managers and

advisers that do not provide it with free research, when selecting and retaining managers and

advisers.

Video Conferencing

IPC does provide a video conferencing unit to some Investment Executives in their Wealth

Management Company’s Office at no cost to the Wealth Management Company. IPC

believes that a video installation increases the effectiveness of the communication between

IPC and the Client. The installation of a video conferencing unit to communicate with IPC

may be considered an inducement for the Wealth Management Company or an Investment

Executive to recommend a managed account offered by IPC over other managed account

services.

FINANCIAL INFORMATION

IPC does not require nor solicit prepayment of more than $1,200 in fees per Client, six months or

more in advance.

SERVICES AND COMPENSATION DISCLOSURE (ERISA)

If the Employee Retirement Income Security Act of 1974 (“ERISA”) governs IPC’s duties to a

Client’s pension or retirement plan (the “Plan”), the Client must consider the disclosures

described in this Brochure and the Client’s Letter Agreement signed with Independent Portfolio

Consultants, Inc. which describes the services that IPC will provide to the Client for participating

in the managed assets program. If the Client signs an Investment Management Agreement with

the investment management firm the Plan selects to provide investment management for the

Client’s Account, please refer to that document for additional disclosures. Also, if applicable,

refer to the Investment Advisory Agreement signed with IPC for Clients electing to participate in

the Multiple Manager Strategy Portfolio.

Services

IPC services provided to the Plan are as stated by the Client’s Letter Agreement, Investment

Management Agreement and/or Investment Advisory Agreement as described in the above

paragraph. Additionally, please refer to the following sections in this disclosure brochure

document for additional services provided: “Services, Fees and Compensation,” “Portfolio

Manager Selection and Evaluation” and “Additional Information.”

Status

IPC provides those services directly to the Plan as an investment adviser registered under the

Investment Advisers Act of 1940 and as a fiduciary (within the meaning of ERISA) pursuant

to the terms and conditions and the services provided to the Plan as described in the Client’s

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Letter Agreement, Investment Management Agreement and/or Investment Advisory

Agreement as described above at the beginning of this section.

Direct Compensation

IPC’s direct compensation is as stated in the Client’s Letter Agreement signed with

Independent Portfolio Consultants, Inc. which describes the services that IPC will provide to

the Client for participating in the managed assets program. If the Client signs an Investment

Management Agreement with the investment management firm the Plan selects to provide

investment management for the Client’s Account, please refer to that document for additional

disclosures. Also, if applicable, refer to the Investment Advisory Agreement signed with IPC

for Clients electing to participate in the Multiple Manager Strategy Portfolio. In addition,

please refer to the following sections in this disclosure brochure document for additional

services provided: “Services, Fees and Compensation” and Evaluation” and “Additional

Information.”

Indirect Compensation

Indirect sources of compensation is compensation IPC will receive from other parties that are

not related to the Plan (“indirect” compensation). This section describes potential sources of

indirect compensation that IPC may receive in connection with its provision of investment

advisory services (i.e., those fees or other compensation that may be received by IPC from

parties other than the Client’s Plan, or the Plan Sponsor).

From time to time, IPC may receive marketing and training support payments, conference

subsidies, and other types of financial and non-financial compensation and incentives from

Investment Managers and other vendors to support the sale of IPC’s products and services to

IPC’s clients, including IPC’s ERISA Plan clients. However, based on IPC’s historical

experience, the aggregate value of these payments to IPC in any particular year has

represented less than one basis point (0.0001) or 1/100ths of 1.0% of IPC’s total customer

assets. Note that the level of vendor support, is not dependent on, nor related to, the level of

assets invested by the Plan or any of IPC’s other clients invested in or with the products or

services of the Investment Manager. A list of those Investment Manager(s) can be provided

by contacting Independent Portfolio Consultants, Inc. (“IPC”) at the address listed on the 1st

page of this document or calling (800) 346-4570 or sending an e-mail to

customerservice@ipcanswers.com.

IPC employees may receive non-cash indirect compensation from time to time in the form of

gifts of nominal value (i.e., having value less than $250), occasional meal or entertainment

(e.g., tickets to concert or sporting events), or reimbursement for certain expenses related to

attendance at educational conferences or seminars that may be attended by plan sponsors and

representatives. Based on historic trends, IPC does not expect to receive gifts in excess of

the de minimis threshold under the regulations with respect to the Plan.

The services for which indirect compensation is received are the services provided to the

Plan as described in the Client’s Letter Agreement signed with Independent Portfolio

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Consultants, Inc. which describes the services that IPC will provide to the Client for

participating in the managed assets program. If the Client signs an Investment Management

Agreement with the investment management firm the Plan selects to provide investment

management for the Client’s Account, please refer to that document for additional

disclosures. Also, if applicable, refer to the Investment Advisory Agreement signed with IPC

for Clients electing to participate in the Multiple Manager Strategy Portfolio.

Compensation Paid Among Related Persons

Except as described by the preceding paragraph, IPC will not, concerning IPC’s services

under the Client’s Letter Agreement, Investment Management Agreement and/or Investment

Advisory Agreement as described above at the beginning of this section, pay to an affiliate or

a subcontractor compensation that is set on a transaction basis or that is charged directly

against the plan’s investment and reflected in the net value of the investment.

Manner of Receipt

In a separately managed account, IPC’s direct compensation is billed and collected from the

Plan’s assets as provided by the terms and conditions in the Client’s Letter Agreement,

Investment Management Agreement and/or Investment Advisory Agreement as described

above at the beginning of this section.

Compensation for Termination of Contract or Arrangement

A Client’s Letter Agreement, Investment Management Agreement and/or Investment

Advisory Agreement as described above at the beginning of this section does not provide IPC

with compensation that results because of either party’s termination. IPC remains entitled to

compensation that accrued before the effective time of the Client’s Letter Agreement,

Investment Management Agreement and/or Investment Advisory Agreement termination.

BROCHURE SUPPLEMENT

Refer to IPC’s Part 2B of Form ADV (“Brochure Supplement”) for information about each of

IPC’s employees who formulate investment advice, have discretionary authority over Clients’

assets or have direct Client contact (“Supervised Persons”).